Invoice Factoring Cost Calculator

About this calculator

Invoice factoring is a way for a business to turn an unpaid invoice into cash today instead of waiting 30, 60, or 90 days for a customer to pay. A factoring company buys the invoice at a discount: it advances a percentage of the invoice's face value upfront (commonly in the 70-90% range) and pays the remainder, minus its fee, once the customer settles the invoice in full. The factoring fee is usually charged as a percentage of the invoice value, sometimes scaled by how long the invoice remains outstanding.

Businesses with long customer payment terms but immediate needs — payroll, inventory purchases, growth — use factoring as an alternative to a bank loan, trading a slice of the invoice's value for speed and no added debt on the balance sheet. This calculator takes the invoice amount, advance rate, and fee rate and shows the upfront advance you'd receive, the factoring fee charged, and the final payout once the invoice is collected.