Invoice finance cost calculator

How the calculation works

With invoices raised evenly and paid after the average number of days you enter, the unpaid ledger is roughly monthly sales × days ÷ 30. The provider advances its percentage of that.

Cash in use = Sales × Days ÷ 30 × Advance%; Monthly cost = Cash in use × Discount ÷ 12 + Sales × Service fee

Dividing the yearly cost by the cash in use gives a comparable rate. Minimum fees, audits and bad-debt cover are extra where they apply.

Questions, answered

What is a discount charge?

The interest-like charge on the money advanced, usually quoted as a margin over a base rate a year.

What is the service fee?

A charge for running the facility, usually a percentage of the invoices you finance or of your turnover. With factoring it also pays for credit control.

Why do faster-paying customers make it cheaper?

Because less money is advanced for less time. If customers pay in 30 days rather than 60, the cash in use and the discount charge roughly halve.

An illustration from the figures you enter, not a quote or advice. A provider’s offer depends on its assessment of your business.