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Invoice factoring calculators help you move beyond the basic question of ‘Is factoring right for my business?’ to understand exactly how much working capital you could access and at what cost.

As you evaluate factoring companies and their rates, this calculator will give you a clear picture of your potential advance amount, fees, and bottom-line numbers before you commit to an agreement.

How to Use an Invoice Factoring Calculator

Our invoice factoring calculator is designed to provide you with quick and precise calculations based on common factoring rates and fees, helping you to understand the cost of factoring your invoices. We created this factoring calculator with the following input fields:

  • Amount Factored: The total amount of invoices factored
  • Discount Rate: The percentage deducted from the invoice value as the cost of factoring
  • Advance Rate: The percentage of the invoice value advanced upfront by the factor

By entering these inputs, we can calculate:

  • Advance Amount: The upfront cash you’ll receive after selling invoices
  • Factoring Fee: The fee calculated based on the invoice amount and the factoring rate
  • Cash After Invoices Paid: Cash received when invoices are paid
  • Total Cash Received: Total of the cash advance plus any remaining amount

Note that there are other fees factoring companies can tack on, which can add up depending on the company you decide to sign a contract with. While the worst factoring companies add on fees wherever possible, there are good factoring companies that prefer transparency and value long term relationships.

Invoice Factoring Calculator


$50,000


2.5%


97%

Results:

Cash Advance: $0.00

Factoring Fee: $0.00

Cash After Invoices Paid: $0.00

Total Cash Received: $0.00

Calculation of Factoring Costs

The calculation for the costs of factoring involves a few key financial metrics. Here’s a breakdown of the calculation for each variable:

  1. Advance Amount
    • The Cash Advance is the upfront amount you receive from the factoring company
    • Amount Factored * Advance Rate = Advance Amount
  2. Factoring Fee
    • The Factoring Fee is the cost charged by the factoring company for providing their service
    • Amount Factored * Factoring Rate = Factoring Fee
  3. Cash After Invoices Paid
    • This value represents how much cash remains after all amounts tied to financing and fees are settled
    • Amount Factored – Advance Amount – Factoring Fee = Cash After Invoices Paid
  4. Total Cash Received
    • Total Cash Received combines your initial advance with any remaining balance after settling accounts
    • Advance Amount + Cash After Invoices Paid = Total Cash Received

Summary of Our Invoice Factoring Calculator

Beyond calculating the advance amount and total factoring cost, our calculator offers insights into immediate cash availability and overall financial impact on your business. The tool is meant to be helpful to compare scenarios, allowing you to choose the most viable path for your business.

To maximize the benefits provided by the factoring calculator, pay attention to how each input affects your bottom line. Pay attention to both short-term gains (like immediate cash availability) and long-term impacts (such as annualized costs).

Ready to Start Factoring?

Now that you’ve run the numbers through our invoice factoring calculator, you can see exactly how this financing solution could work for your business. While the rates and terms may vary between factoring companies, having these baseline calculations helps you make an informed decision about whether factoring is right for your cash flow needs.

Ready to explore specific factoring options? Check out our guide and get quotes from the best factoring companies.

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