Estimate the advance, factoring fee, and final reserve payment
An invoice factoring calculator estimates the cash advanced against an invoice, the factoring cost, and the reserve that may be released after the customer pays. It helps businesses compare faster cash flow with the cost and terms of the facility.
Formula
Worked example
For a $20,000 invoice with an 85% advance, the initial advance is $17,000. The final amount depends on the fee structure, time outstanding, customer payment, and any additional charges or adjustments.
Fee structure and time outstanding both matter
Some arrangements charge a flat fee for a period, while others add fees as the invoice remains unpaid. Minimums, wire charges, due-diligence costs, and concentration limits can affect the all-in cost.
Model payment after 30, 45, 60, and 90 days when the fee increases over time. This shows how customer payment speed changes the economics.
Compare recourse, non-recourse, and eligibility terms
Recourse terms can require the business to repurchase an unpaid invoice. Non-recourse coverage is usually limited to specified risks and conditions rather than every reason for nonpayment.
The cheapest percentage is not automatically the best offer. Review advance rate, reserve handling, customer notice, contract term, minimum volume, termination rights, and which invoices qualify.
Information to collect from a factoring quote
- Advance rate and reserve percentage.
- Fee calculation method and timing increments.
- Additional, minimum, or termination charges.
- Recourse conditions and invoice eligibility rules.
Last reviewed September 8, 2026. This calculator provides an estimate for planning and education. Verify current rates, rules, and account-specific terms with the relevant official source.