Free tool
Factoring cost calculator: compare two offers
Factoring companies advance cash against your invoices for a fee. The headline percent rarely tells the whole story, because the fee often grows the longer your customer takes to pay. Enter the terms from two offers and compare them on the same invoice.
We quote no rates and we are not a factor
Every percentage in the example is invented (EXAMPLE VALUES) and is not an offer or a market rate. Use the numbers from the contracts you are actually comparing.
Result
Runs in your browser. Nothing you type is sent anywhere. Example numbers are invented (EXAMPLE VALUES). This is a calculator, not financial, tax or legal advice.
The formulas
extra periods = ceil((days to pay - first period) / extra period length), 0 if paid in the first period fees = invoice x first fee + extra periods x invoice x extra fee + flat fee advance = invoice x advance rate you end up with = invoice - fees simple annualized cost = fees / advance x 365 / (days to pay - days to advance)
Worked example (invented)
Invoice $2,400, paid in 38 days. Offer A: 3% for 30 days plus 0.5% per extra 10 days, 90% advance. Eight days late is one extra period: fees are $72.00 + $12.00 = $84.00. You end up with $2,316.00.
Terms that change the answer
- Recourse or non-recourse. Who pays if the customer never does. It changes risk, not this arithmetic.
- Minimum volume or monthly minimum fees. A fee you pay even in a slow month.
- Reserve release. When the rest of the invoice comes back, and what is subtracted.
- Fees on top of the percent. Same-day funding, wires, fuel-card fees, lockbox.
- Contract length and termination. Read these before the rate.
The result is only as good as the terms you type. Read the full fee schedule and ask the factor to write down a worked example. Our invoice aging tool shows how many of your invoices run past 30 days, which is where fees grow.
Questions
Is the annualized cost an APR?
No. It is a simple way to compare, not an APR as defined by any law. It ignores compounding and any fee that is not on the schedule you entered.
Do you recommend a factor?
No. We are not a factor and not a referral service. We do not name or rank factoring companies.
Does factoring replace the audit?
No. Factoring speeds up cash on invoices you have already sent. It does not find billing you missed. See revenue recovery.
Formula table
| Quantity | Formula | Note |
|---|---|---|
| Extra periods | ceil((days to pay - first period) / extra days) | Only if the customer pays late. |
| Fees | invoice x fee % + extra periods x extra % + flat | Check your fee schedule. |
| Cash advanced | invoice x advance % | The rest is held back. |
| Simple annualized cost | fee / advance x 365 / days outstanding | For comparison, not an APR. |
What this means for you
A low headline fee can cost more once slow payers trigger extra periods. The chart puts the two offers side by side for the pay time you typed. Rerun with a slower customer to see where the cheaper offer flips.
Related tools
See what your last 20 loads show.
One short form. We reply by email with the next step, and a one-page report follows. Free, no obligation.
Mon-Fri, 9:00 a.m.-5:00 p.m. Eastern Time (Raleigh, NC). Voicemail is answered the next business day.