What does it cost to factor an invoice?

Work out what a factor's advance, fee per period and other fees cost on one invoice, in dollars and as an estimated APR, and what a monthly minimum adds.

Last checked: October 21, 2026Worked out in your browser, nothing stored

With factoring you sell an invoice to a factor. It pays you an advance, a share of the invoice, when it buys it, collects the invoice from your customer, and then pays you the rest, less its fee. The fee is usually a percentage of the invoice for each period it is outstanding, so the longer your customer takes to pay, the more you pay. An agreement can also set a minimum fee per invoice, other fees, and a minimum amount of invoices to sell each month.

This calculator works out the cost of one invoice in dollars, and as an estimated APR: the fee measured against the money you get, for the days until your customer pays, the way the federal Truth in Lending rules (Regulation Z) work out the APR on a single payment.

Estimated APR

31.10%

If paid in 45 days

Cost of this invoice

$325.00

3.25% of the invoice

Cash you receive now

$8,475.00

The advance, less other fees

Paid to you later

$1,200.00

When your customer pays

Fee periods charged: 2 of 30 days
Factoring fee: $300.00
Other fees: $25.00
Minimum volume fee a month: $150

If your customer pays later
Paid in	Cost	Estimated APR
45 daysYour answer	$325.00	31.10%
60 days15 days later	$325.00	23.33%
75 days30 days later	$475.00	27.28%

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Worked example: A $10,000 invoice, 85% advanced, at 1.5% for each 30 days, paid in 45 days

A made-up example, not a quote from any factor: a $25 minimum fee, a $25 transfer fee taken from the advance, and a $50,000 monthly minimum against $40,000 of invoices sold a month. The 45 days are charged as two 30-day periods.

Invoice: $10,000
Advance: 85% of the invoice: $8,500.00
Other fees taken from it: $25.00
Cash you receive now: $8,475.00
Factoring fee: 1.5% for each 30 days, 2 periods for 45 days: $300.00
Paid to you when your customer pays: $1,200.00
Cost of this invoice: $325.00
Estimated APR: 31.10%
Minimum volume fee a month, selling $40,000 against a $50,000 minimum: $150

If the customer took 75 days instead, the fee would be $450.00 and the estimated APR 27.28%: you pay for each period the invoice is outstanding, and a part period counts in full.

Worth knowing

A part period is usually charged in full, so an invoice paid on day 31 can cost as much as one paid on day 60. Ask how the factor counts the days, such as from when it buys the invoice to when it has your customer's money in full.
Some agreements charge different rates as an invoice gets older, such as a set fee for the first 30 days and a smaller one for each 15 days after 90. Enter the rate for your customer's usual payment time, or work out each step separately.
A minimum volume fee is charged when you sell less than the agreed amount, and an agreement can charge an exit fee if you end it early, worked out from the fees the factor would have earned for the rest of the term. Read both before you sign.
New York requires many factors to show an estimated APR worked out under the federal Truth in Lending rules, and California an APR or estimated APR. Florida and Missouri let a factor base its disclosure on an example invoice of $10,000. Each route page lists the rules that differ by state.
If the agreement is with recourse and your customer does not pay, you may have to buy the invoice back. This calculator assumes your customer pays.

Routes this works for

Sources

U.S. Department of Commerce, International Trade Administration: Trade Finance Guide (export factoring and its costs) · checked October 21, 2026
SEC EDGAR: a master factoring agreement filed as an exhibit (2005): discount fee by days outstanding, minimum fee, advance rate, minimum volume fee and exit fee · checked October 21, 2026
OCC Comptroller's Handbook: Accounts Receivable and Inventory Financing (factoring) · checked October 21, 2026
12 CFR 1026, Appendix J (Regulation Z): annual percentage rate computations for closed-end credit · checked October 20, 2026
New York Financial Services Law section 806: factoring transaction disclosures · checked October 17, 2026
California Financial Code, Division 9.5: Commercial Financing Disclosures (sections 22800 to 22807) · checked October 17, 2026
Florida Statutes, chapter 559, part XIII: Florida Commercial Financing Disclosure Law (559.961 to 559.9615) · checked October 17, 2026
Revised Statutes of Missouri 427.300: Commercial Financing Disclosure Law · checked October 17, 2026

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