Invoice Factoring Calculator
Cash received when factoring receivables
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Invoice Factoring Calculator is built for cash received when factoring receivables — fast, free, and private. Type Invoice Value ($), Advance Rate (%) and Factoring Fee (%) into Invoice Factoring; each keystroke re-runs the math. Invoice Factoring puts the headline number first. Invoice Factoring shines when speed matters. Invoice Factoring runs in your browser. Finance data stays in the tab. Invoice Factoring is part of the Finance collection on CalcProMaster, alongside invoice factoring calculator advance rate factor fee receivables, free online invoice factoring calculator and more. Invoice Factoring has no learning curve. The fields are labeled. Invoice Factoring answers the next Finance question you meet.
What the defaults give
Factoring a $50,000 invoice at an 85% advance rate with a 2% fee pays $41,500 today.
The advance is $42,500, the fee is $1,000 charged on the full face value, and $7,500 stays with the factor until your customer pays.
The formula
Advance = invoice × advance rate
Fee = invoice × fee rate
Cash today = advance − fee
The important detail is that the fee is charged on the whole invoice, not on the advance. At an 85% advance the fee is still 2% of $50,000, not 2% of $42,500, so the effective cost of the money actually handed over is slightly higher than the headline rate.
Worked examples
$50,000, 85%, 2% → 42,500 − 1,000 = $41,500
$50,000, 80%, 2% → 40,000 − 1,000 = $39,000
$50,000, 85%, 3% → 42,500 − 1,500 = $41,000
$100,000, 85%, 1.5% → 85,000 − 1,500 = $83,500
$20,000, 90%, 3% → 18,000 − 600 = $17,400
$50,000, 90%, 1% → 45,000 − 500 = $44,500
The annualised cost is the number that matters
A 2% fee sounds cheap next to a 20% overdraft, but it is charged for the weeks the factor waits, not for a year. On a 45-day payment term, 2% works out at about 16% annualised (2% × 365/45); on 30-day terms it is nearer 24%. That is the rate to compare against an invoice-discount line, a business credit card or a short-term loan.
The comparison changes with your customer payment terms. Slow payers make factoring more expensive in annual terms and more valuable in cash-flow terms at the same time, which is why the decision usually comes down to whether the work can be delivered without the cash rather than to the fee alone.
What the net figure leaves out
The $7,500 reserve is not lost: it is released when your customer settles, minus any remaining fee, chargeback or disputed amount. Recourse factoring can also claw the advance back if the customer never pays, which is a credit risk the invoice does not remove. Non-recourse deals price that risk into the fee.
Setup fees, minimum monthly volume charges, and per-invoice administration fees are not in the calculation. A 1% monthly minimum on a quiet month can cost more than the factoring on the invoices you actually send.
Frequently Asked Questions
How much cash do I get factoring a $50,000 invoice?
$41,500 at an 85% advance and a 2% fee. The advance is $42,500 and the fee $1,000, both taken today.
Is the fee charged on the advance or the invoice?
On the full invoice face value. A 2% fee on $50,000 is $1,000 even though only $42,500 was advanced.
What is the real annual cost of a 2% factoring fee?
Roughly 16% if customers pay in 45 days, because the fee is charged per cycle rather than per year. At 30-day terms it approaches 24%.
Do I get the reserve back?
Yes, when your customer pays. The $7,500 withheld at 85% is released then, less any remaining fee or disputed amount.
Is factoring cheaper than an overdraft?
Usually, for short cycles. Compare annualised rates: 2% over 45 days is about 16% a year, which is typically below an unsecured overdraft but above a secured line.
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