What is invoice factoring?

It is selling unpaid invoices to a factoring company for an upfront cash advance (often 70%–90% of the invoice). When your customer pays, you receive the reserve minus the factoring fee.

How much does factoring cost?

Cost depends on the fee rate and how long the invoice takes to collect — a 3% fee over 30 days is far cheaper than the same fee accruing over 90. The calculator estimates the effective cost for your timeline.

What is recourse vs non-recourse factoring?

With recourse factoring you must buy back invoices the customer never pays; with non-recourse the factor absorbs certain non-payment risk, usually for a higher fee. Always read which type a contract uses.

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Invoice Factoring Rate Calculator

Estimate the cash advance, reserve holdback, factoring fee, and real cost of selling unpaid invoices.

Total invoice amount

Advance rate %

Factoring fee % per 30 days

Expected collection days

Factoring cost depends on contract terms, recourse/non-recourse rules, customer credit, minimum fees, and collection timing.

How this tool works

Enter your total invoice amount, the advance rate, the factoring fee per 30 days, and how long you expect collection to take. The tool estimates your upfront advance, the reserve held back, the fee, your net cash, and the effective cost as a percentage.

Why it matters for your credit

Invoice factoring trades a slice of your receivables for faster cash, but the true cost depends on advance rate, fee structure, and how long the invoice takes to pay. Converting it to an effective percentage lets you compare factoring against other financing instead of guessing.

Frequently asked questions

What is invoice factoring?: It is selling unpaid invoices to a factoring company for an upfront cash advance (often 70%–90% of the invoice). When your customer pays, you receive the reserve minus the factoring fee.
How much does factoring cost?: Cost depends on the fee rate and how long the invoice takes to collect — a 3% fee over 30 days is far cheaper than the same fee accruing over 90. The calculator estimates the effective cost for your timeline.
What is recourse vs non-recourse factoring?: With recourse factoring you must buy back invoices the customer never pays; with non-recourse the factor absorbs certain non-payment risk, usually for a higher fee. Always read which type a contract uses.

This tool gives an educational estimate only — not a promise of a specific score change, approval, or lender decision. Explore all free tools, dispute letter templates, or the credit guides.