Factoring fee and cash flow calculator
Factoring trades a fee for faster cash. See exactly what you pay and what lands in your account.
How to use it
Enter one typical invoice and the terms in your factoring agreement or quote. The numbers already in the boxes are only an example, not a typical rate. Rates and advance percentages vary by factor, volume, recourse terms and your brokers.
The advance is what the factor pays when it buys the invoice. The reserve is the rest, paid after the broker pays, minus the fee. Count how many invoices you factor in a month to see the monthly and yearly cost, then compare it with waiting for the broker's terms or using quick pay.
Reading the results
The yearly rate treats the fee as the price of getting the advance early: fee ÷ advance × 365 ÷ days to pay. It's a way to compare factoring with other ways to cover cash, like a line of credit or broker quick pay, not a rate any lender has to quote. Agreements differ on whether the fee comes out of the advance or the reserve, and some charge more when a broker pays late. Use the numbers in your own agreement, and see working with a factoring company for how advances, reserves and chargebacks work.
Questions carriers ask
How is a factoring fee calculated?
Most agreements charge a percentage of the invoice, and some add transfer or other fees. Some raise the fee the longer the broker takes to pay. Your agreement says which.
Is factoring cheaper than waiting 30 days?
Waiting costs nothing in fees, but you have to cover fuel and bills in the meantime. Compare the yearly cost with what other short-term cash would cost you.
What's the difference between the advance and the reserve?
The advance is paid when the factor buys the invoice. The reserve is held back until the broker pays, then released minus the fee and anything the contract allows the factor to deduct.