Last updated: 11 October 2026 · Calculation checked against published worked examples
Invoice Factoring Calculator: True Cost and Quote Comparison
Compare Factoring Quotes in Seconds
Enter your invoice and up to three quotes. The effective APR, fees, and rebate update live. Nothing leaves your device.
Your Invoice
Factoring Quotes
Quote A
Quote B (optional)
Quote C (optional)
A quote is included once it has both an advance rate and a fee rate. "Flat" charges the fee once whatever the days; "per 30 days" pro-rates it by the days entered above.
Quote Comparison
Effective APR = (total fees ÷ cash advanced) × (365 ÷ days). Headline APR divides by the invoice value instead, which is how some calculators show it.
Quick answer: Invoice factoring is commonly quoted at about 1% to 5% of the invoice per 30 days, with 70% to 95% advanced upfront. To compare quotes fairly, convert each to an annual rate: effective APR = (total fees ÷ cash advanced) × (365 ÷ days until paid). On a $50,000 invoice with a 90% advance, a 3% flat fee and 45 days to payment, that is 27.0%, not the 24.3% you get by dividing by the invoice value. Enter up to three quotes above and the calculator shows both figures, the reserve rebate, and the extra cost against a loan, all in your browser.
- Cost: Free, unlimited quotes, no signup, no watermark.
- Where it runs: 100% in your browser, nothing is uploaded.
- Compares up to 3 quotes: side by side, with the cheapest highlighted.
- Two fee types: flat per invoice, or per 30 days pro-rated by days.
- Both APR bases shown: true cost on cash advanced and headline cost on invoice value.
- US and UK: dollars or pounds, factoring or invoice finance.
Calculation Aid, Not Financial Advice: Your factor's contract governs what you actually pay. Check minimum volumes, termination fees, and recourse terms that this calculator does not model.
Typical Ranges Vary: The 1% to 5% and 70% to 95% ranges are commonly reported figures. Industry, volume, and your customers' credit quality move them, so use the numbers from your own quotes.
Add Every Extra Charge: Wire, ACH, and administration fees can add noticeably to the cost. Put them in the "Other Fees" box.
Privacy: Your figures are processed locally and never uploaded or stored.
Why Do Factoring Calculators Give Different APRs?
Search for an invoice factoring calculator and you will find tools that disagree about the same quote. The difference is the base used to annualise the fee. Neither is a mistake, but they answer different questions - and only one tells you what the money you actually receive costs.
| Method | Formula | Result for the example below |
|---|---|---|
| True cost (on cash advanced) | (fees ÷ advance) × (365 ÷ days) | 27.04% |
| Headline (on invoice value) | (fees ÷ invoice) × (365 ÷ days) | 24.33% |
Example: $50,000 invoice, 90% advance ($45,000 cash), 3% flat fee ($1,500), customer pays in 45 days.
The factor does not hand you the full $50,000 on day one. It advances $45,000 and holds $5,000 back as a reserve. Your fee is charged against the whole invoice, but the money you are really borrowing is the $45,000 advance. Dividing the fee by the cash you actually received - 27.04% - is the fair comparison against a loan or overdraft, because a loan's APR is also measured on the money you borrowed. This calculator shows both so you can reconcile any other tool's figure.
It also explains why two quotes with the same headline can differ in real cost. A factor advancing 90% instead of 85% charges the same dollar fee on more advanced cash, so its effective APR is lower. In the default example above, quotes A and B both cost $750, yet the effective APRs are 28.63% and 27.04%.
How to Calculate the True Cost of Invoice Factoring
Enter the Invoice
The amount and how many days your customer takes to pay.
Enter Each Quote
Advance rate, fee rate and type, and other fees.
Add an Alternative Rate
Optionally, the rate you could borrow at instead.
Compare and Save
Read the lowest effective APR, then download the PDF.
Your Figures Never Leave Your Device
Every calculation and the PDF comparison are produced by JavaScript running in your browser tab. There is no upload, no account, and no server that ever sees your invoice amounts or quotes.
Invoice Factoring Calculator: Complete Guide
Invoice factoring lets a business turn unpaid invoices into cash now. You sell an invoice to a factor, which advances most of its value immediately, collects from your customer, and releases the balance - less its fees - when the customer pays. In the UK the same family of products is usually called invoice finance. It solves a cash-flow gap, but the pricing is quoted in ways that make comparison hard, which is exactly what the calculator above is for. If you are chasing late payers directly, our UK late payment interest calculator shows what interest and compensation you can claim, and the invoice generator helps you issue clear invoices in the first place.
How the Numbers Work
| Item | Formula |
|---|---|
| Advance | Invoice × advance rate |
| Discount fee (flat) | Invoice × fee rate |
| Discount fee (per 30 days) | Invoice × fee rate × (days ÷ 30) |
| Total fees | Discount fee + other fees |
| Reserve | Invoice − advance |
| Rebate | Reserve − total fees |
| Total cash received | Advance + rebate (= invoice − total fees) |
Days to Payment Change the APR
With a flat fee, the annualised cost depends heavily on how quickly your customer pays, because the same fee is spread over more or fewer days. Here is a 2% flat fee on a $50,000 invoice with an 85% advance:
| Customer Pays In | Fee | Effective APR (on cash advanced) |
|---|---|---|
| 15 days | $1,000 | 57.25% |
| 30 days | $1,000 | 28.63% |
| 45 days | $1,000 | 19.08% |
| 60 days | $1,000 | 14.31% |
| 90 days | $1,000 | 9.54% |
Halve the days and the APR doubles, so a flat fee is dearest on your fastest-paying customers. A rate charged per 30 days behaves differently: the fee grows with the days, so the effective APR stays roughly constant (28.63% at a 2% rate with an 85% advance, whether the invoice runs 15 days or 90).
Factoring vs Invoice Discounting vs a Loan
| Option | How it works | Worth knowing |
|---|---|---|
| Factoring | You sell invoices; the factor typically collects from your customers. | Your customers usually know a factor is involved. |
| Invoice discounting | You borrow against invoices but usually keep collecting yourself. | Often less visible to customers. The cost maths here applies equally. |
| Bank loan or overdraft | You borrow against the business's overall credit. | Usually cheaper annualised, but slower to arrange and tied to your own credit. |
To judge whether factoring is worth the premium, enter your alternative borrowing rate above. The calculator then shows how much more, in money, each quote costs than borrowing the same cash at that rate for the same days.
Hidden Charges to Look For
- Administration or processing fees charged per invoice or per month
- Wire and ACH transfer charges
- Minimum monthly volume or minimum fee commitments
- Termination or early-exit fees
- Whether the arrangement is recourse (you repay unpaid invoices) or non-recourse
Add the fixed ones to the "Other Fees" box so they flow into the APR. The ones that depend on volume or exit terms are not modelled, so read your contract carefully. If you are considering lending or borrowing outside a factor, a clear promissory note sets the terms in writing.
How This Calculator Actually Works
For each quote that has both an advance rate and a fee rate, the calculator multiplies the invoice by the advance rate to get the cash advanced, then works out the discount fee either as a flat percentage of the invoice or as a rate per 30 days pro-rated by the days you entered. It adds the other fees to get total fees, subtracts the advance and the fees from the invoice to find the rebate, and divides total fees by the advance, scaled by 365 over the days, to get the effective APR. It also divides by the invoice value to show the headline figure, and, if you entered an alternative rate, compares total fees with the cost of borrowing the same advance at that rate for the same days. The lowest effective APR is highlighted. The PDF is drawn locally with jsPDF and jsPDF-AutoTable. Nothing ever touches a server.
Security and Privacy Considerations
- No Data Upload: Every figure you enter stays on your device.
- No Server Processing: Calculation and PDF generation run as client-side JavaScript.
- No Account Needed: No login and no usage cap.
Browser Compatibility and Technical Requirements
This calculator works in modern browsers that support JavaScript and Blob downloads.
- Chrome and Edge 76+
- Firefox 55+
- Safari 13.1+
- Mobile Chrome (Android) and Mobile Safari (iOS)
Troubleshooting Common Issues
Explanation: A quote is only included once it has both an advance rate and a fee rate above zero. Solution: Fill in both fields for that quote.
Explanation: The advance plus the fees is more than the invoice, so the rebate would be negative. Solution: Check the advance rate, fee rate, and days. A real factor would normally not let this happen.
Explanation: Many tools divide by the invoice value instead of the cash advanced. Solution: Compare against the "headline APR" row, which uses that basis.
Explanation: With a flat fee, fewer days means a higher annualised cost. With a per-30-day fee it stays roughly constant. Solution: This is expected - check which fee type the quote uses.
Frequently Asked Technical Questions
Question 1: What builds the PDF?
Answer: jsPDF, a widely used open-source JavaScript library, with its jsPDF-AutoTable plugin for the comparison table, both loaded in your browser.
Question 2: Why is APR measured on cash advanced?
Answer: Because the cash advanced is the money you are effectively borrowing. A loan's APR is measured on the amount borrowed, so using the advance gives a like-for-like comparison.
Question 3: How is a per-30-day fee pro-rated?
Answer: The fee is the invoice times the rate times days divided by 30, so 45 days is charged as one and a half periods. Some factors charge for each started period instead, so check your quote.
Question 4: How is the alternative-rate comparison calculated?
Answer: The cost of borrowing the advance at your alternative rate is advance times rate times days divided by 365. The extra cost is total fees minus that figure.
Question 5: Does it need an account, server, or API key?
Answer: No. It runs as ordinary JavaScript already loaded by this page.
Glossary of Terms
- Advance Rate
- The percentage of an invoice's face value that the factor pays you upfront.
- Discount Fee (Factor Rate)
- The factor's charge, quoted either as a flat percentage of the invoice or as a percentage per 30 days.
- Reserve
- The portion of the invoice not advanced upfront, held by the factor until your customer pays.
- Rebate
- The reserve released to you after your customer pays, less the factor's fees.
- Effective APR
- The annualised cost of financing, calculated as total fees divided by cash advanced, scaled to a year by the days until payment.
Frequently Asked Questions
Multiply the invoice amount by the factor's fee rate. If the rate is quoted per 30 days, pro-rate it by the days until your customer pays (fee = invoice × rate × days ÷ 30). Then add any other charges such as wire, ACH or administration fees.
Effective APR = (total fees ÷ cash advanced) × (365 ÷ days until paid) × 100. Dividing by the cash actually advanced, not the invoice value, reflects the true cost of the money you receive.
Some divide the fee by the invoice face value and others by the cash advanced. On a $50,000 invoice with a 90% advance, a 3% flat fee and 45 days to payment, that is 24.3% versus 27.0%. This calculator shows both so you can see the difference.
Commonly reported figures are fees of roughly 1% to 5% of the invoice per 30 days with 70% to 95% of the invoice advanced upfront. Actual terms vary by industry, volume and your customers' credit quality, so use the figures in your own quote.
It depends on the fee structure. With a flat fee, a faster payer makes the annualised cost higher because the same fee is spread over fewer days. With a rate charged per 30 days, the fee shrinks along with the days, so the APR stays roughly constant.
The reserve is the part of the invoice not advanced upfront. When your customer pays, the factor releases the reserve to you minus its fees, and that released amount is the rebate.
Factoring usually costs more than a bank loan on an annualised basis, but it can be faster to arrange and depends on your customers' credit rather than your own. Enter your alternative rate in the calculator to see the extra cost in money terms.
With factoring you sell your invoices and the factor typically collects payment from your customers. With invoice discounting you borrow against your invoices but usually keep control of collecting payment yourself. The cost maths in this calculator applies to both.
Yes. In the UK the product is usually called invoice finance. Switch the currency to pounds and enter the advance rate and fees from your quote.
No. Everything is calculated in your browser using JavaScript, and the PDF is generated locally. Nothing is uploaded or stored.
Final Thoughts
A factoring quote only makes sense once it is annualised on the cash you actually receive. Put your quotes side by side above, check the effective APR against your alternatives, and read the contract for the charges a calculator cannot see.