How does invoice factoring work?

You sell your unpaid invoices to a factor. The factor advances a percentage of the invoice value now (the advance rate), then releases the remaining reserve — minus its factoring fee — once your customer pays the invoice in full.

How much does factoring cost?

Cost is driven by the factoring fee (a percentage of the invoice) and the advance rate. Both vary by industry, your customers’ credit, invoice volume, and how long invoices take to pay. This calculator lets you model different advance rates and fees.

No. Factoring is the purchase of receivables, not a loan, so approval rides mainly on your customers’ credit rather than yours. Estimates here are for general information only and not an offer. Not all applicants qualify.

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Invoice Factoring Calculator

See the cash you get now, the factoring fee, the reserve released when your customer pays, and the total you keep.

Frequently asked questions

How does invoice factoring work?: You sell your unpaid invoices to a factor. The factor advances a percentage of the invoice value now (the advance rate), then releases the remaining reserve — minus its factoring fee — once your customer pays the invoice in full.
How much does factoring cost?: Cost is driven by the factoring fee (a percentage of the invoice) and the advance rate. Both vary by industry, your customers’ credit, invoice volume, and how long invoices take to pay. This calculator lets you model different advance rates and fees.
Is factoring a loan?: No. Factoring is the purchase of receivables, not a loan, so approval rides mainly on your customers’ credit rather than yours. Estimates here are for general information only and not an offer. Not all applicants qualify.

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