Invoice Finance Calculator
Calculate your advance amount, factor fees, reserve, and net proceeds from invoice financing or factoring. Instant breakdown of all costs.
About the Invoice Finance Calculator
Invoice financing (also called invoice factoring or accounts receivable financing) allows businesses to borrow against unpaid invoices, receiving a large percentage of the invoice value immediately rather than waiting 30, 60, or 90 days for the customer to pay. This calculator shows exactly how much cash you will receive upfront, what fees the lender charges, and how much you receive when your customer eventually settles the invoice.
The typical structure involves two payments: an advance (usually 70–90% of the invoice value) paid immediately when you submit the invoice, and a reserve released when your customer pays — minus the factor's fees. For a $10,000 invoice with an 85% advance and a 3% fee, you receive $8,500 immediately, and when the customer pays, you receive the remaining $1,500 minus the $300 fee, netting $1,200. Total received: $9,700. The $300 cost is the price of receiving $8,500 thirty-plus days early.
Invoice financing is distinct from a bank loan — you are not taking on new debt, you are monetising an existing asset (the invoice). This makes it accessible to businesses that lack collateral for traditional lending or are in a growth phase where cash flow lags behind sales. The cost is higher than bank debt but lower than the opportunity cost of turning down orders because of cash flow constraints.
How Invoice Finance Works
There are two main structures: factoring (the factor takes over collection from your customer) and invoice discounting (you retain collection responsibility and the arrangement is often confidential). In both cases the advance rate and fee structure are similar, but factoring typically has slightly higher fees because the factor does the credit control work. Most factoring arrangements are disclosed — your customer knows their invoice has been assigned to a third party.
The advance rate is the percentage of the invoice face value you receive upfront. Rates of 80–90% are standard for creditworthy customers with short payment terms. The factor fee (also called the discount rate or service charge) is typically 1–5% of the invoice value per 30-day period, though flat rates are also common. Additional fees may include setup fees, due-diligence costs, and minimum volume charges — always request a full fee schedule before signing an agreement.