Invoice factoring calculator: true cost and APR
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Waiting on a customer to pay? Factoring turns an invoice into cash now. Enter your numbers and I'll show what you get today, what it costs and the APR.
Your numbers
Defaults are examples, not quotes.
Illustrative estimate, not an offer. Factoring companies decide approval, advance rate, fees and terms.
Options I can connect you with
Typical terms, not a promise.
- Advances up to 95% of eligible invoices.
- Pricing as low as about 1% a month.
- Facilities from $100K to $5MM.
- Invoices up to net 120 from creditworthy US businesses.
- Approval in as little as 72 hours.
- You can often pick which invoices to fund.
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Questions owners ask
How much does it cost to factor an invoice?
Fees often start near 1% for the first 30 days and rise the longer your customer takes to pay. At the defaults above, a $50,000 invoice paid in 45 days costs $1,250.
What are typical invoice factoring rates?
Pricing can be as low as about 1% a month. Advances usually run 80% to 95% of the invoice.
What's the difference between invoice financing and invoice factoring?
With factoring, you sell the invoice and the factor collects from your customer. With invoice financing, you borrow against the invoice and still collect it yourself.
How do I turn a factoring fee into an APR?
Divide the total cost by the cash advanced. Then multiply by 365 and divide by the days until your customer pays. This calculator does that for you.
What's a reserve and when do I get it back?
The reserve is the part of the invoice not advanced. You get it back, minus fees, when your customer pays.
What are the downsides of invoice factoring?
It can cost more than a line of credit. Your customers may learn you use a factor. Slow payers raise your fee.
More to read
Estimates only. Your results depend on your invoices, your customers and the factoring company's review.
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Lending Gurus compares options and doesn’t lend. We may earn a referral fee when you apply through our links, but no lender pays for a review or a score, and partner status never changes one. Advertiser disclosure.