Free Tool
Invoice Factoring Cost Calculator
Enter your invoice details below to instantly calculate your net cash advance, total factoring cost, and effective APR — so you know exactly what invoice factoring will cost your business before you sign anything.
Invoice Details
The face value of the invoice you are factoring
% of invoice paid upfront by the factor
% of invoice charged as the factoring fee
How long until your client pays (e.g. Net-30 = 30)
Results
Advance Paid
$45,000
Upfront cash (90%)
Reserve Released
$3,500
After fee deducted
Net Cash Total
$48,500
97.0% of invoice
Effective APR
40.6%
Annualized cost
What this means for your business:
You receive $45,000 upfront (today), then $3,500 once your client pays in 30 days — for a total of $48,500 out of a $50,000 invoice. The factoring company earns $1,500 (3.0%of the invoice). Annualized, that is equivalent to a 40.6% APR — compare this against your other financing options.
Ready to explore factoring options for your business?
The rates above reflect general market conditions based on Federal Reserve data. Actual factoring quotes depend on your invoice volume, client creditworthiness, and industry. These independent directories help you compare offers from multiple factoring companies.
Compare Factoring Companies — Lendio
Marketplace: 75+ lenders
Trucking-Specific Factoring — National Business Capital
Specializes in trucking & staffing
Invoice Factoring Guide — SBA.gov
Official SBA resources
Links marked "Sponsored links" may earn us a referral fee at no cost to you. We only link to established lenders and official government resources. This is not a recommendation to use any specific lender. See our disclosures.
How Invoice Factoring Works
Invoice factoring lets businesses sell unpaid invoices to a third party (the "factor") in exchange for immediate cash. Instead of waiting 30, 60, or 90 days for a client to pay, you get most of the invoice value upfront — minus a fee.
The advance rate (typically 80–95%) is the percentage you receive immediately. The remaining amount — called the reserve — is held until your client pays. Once paid, the factor releases the reserve minus their fee.
The factor fee is the factoring company's profit. It is usually expressed as a percentage of the invoice, often 1–5%. Some factors charge additional fees (origination, wire transfer, monthly minimums) — always read the full contract.
The effective APR this calculator shows is the annualized equivalent of your factoring cost. A 3% fee on a 30-day invoice equals a 36.5% APR — much higher than most bank loans, but often justified by the speed and qualification simplicity.
This calculator is for informational purposes only. Results are estimates based on inputs provided. Actual factoring terms vary by provider, invoice quality, and industry. Not financial advice.