Invoice Factoring Calculator
Estimate the cash advance, reserve released, total fees and effective annual cost of factoring an invoice.
Quick answer
Invoice factoring sells receivables for an advance (a percent of face value) minus fees. Total cost is the fee plus other charges; the annualized rate is (fees / advance) x 365 / days outstanding.
Invoice Factoring Calculator
Percent of invoice (flat), or percent per 30 days.
Advance Received Now
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Reserve Released Later
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Total Fees
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Total Cash Received
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Effective Annual Cost (Simple)
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Effective Annual Cost (Compounded)
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Effect of Days Outstanding
| Days | Total fees (₹) | Fees % of invoice | Annual cost (simple) |
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Assumptions & method
- Advance = invoice × advance rate. Reserve = invoice − advance.
- Flat fee = invoice × fee %. Per-30-day fee = invoice × fee % × days ÷ 30 (prorated daily).
- Total fees = factoring fee + other fixed fees. Fees are deducted from the reserve when it is released.
- Total cash received = invoice − total fees, assuming the customer pays in full on the day entered.
- Effective annual cost = (total fees ÷ advance) × 365 ÷ days (simple), or (1 + total fees ÷ advance)^(365 ÷ days) − 1 (compounded).
- Recourse charges, chargebacks, interest on late customers and tax effects are not included.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
How invoice factoring is priced
With factoring, a business sells an invoice for immediate cash. The factor pays an advance, typically most of the invoice value, holds the rest as a reserve, and collects from your customer. When the customer pays, the reserve is returned to you after the factoring fee and any other charges are deducted. Because the cost is charged on a short period, comparing it with a loan means converting it into an annual rate against the cash actually advanced. This calculator shows each step, so you can judge whether the speed of cash is worth the price.