Invoice finance calculator

Use our handy invoice finance calculator to get an understanding of how much you could release from invoices owed to you.

Page written by Ian Hawkins. Last reviewed on March 11, 2026. Next review due April 1, 2027.

Invoice value

.00

Advance rate

Fee

* Will be paid to you when your client has paid the invoice in full and within the agreed invoice term.

This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.

Your results

Advance amount

$- (-%)

Then

$-*

Estimated fees

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What is factoring?

Factoring is a financial transaction where a business sells its accounts receivable (invoices) to a third party, known as a factor, at a discount. This provides immediate cash flow to the business, allowing it to meet its short-term financing needs without waiting for customer payments.

Factoring formula

The factoring formula calculates the amount of cash advanced by the factor using the following equation:

Cash advance = Invoice amount × (1 – Discount rate)

How much does factoring cost?

The cost of factoring varies depending on factors such as the invoice amount, the creditworthiness of the customers and the terms of the factoring agreement. Typically, factoring fees range from 1% to 5% of the invoice amount, plus a discount rate applied to the outstanding invoices.

Where can I get started?

Businesses interested in factoring can explore options with specialized factoring companies or financial institutions offering factoring services. It’s advisable to compare terms, rates and services offered by different factors to find the best fit for your business’s needs.