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Page written by Ian Hawkins. Last reviewed on March 11, 2026. Next review due October 1, 2027.
* 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.
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.
The factoring formula calculates the amount of cash advanced by the factor using the following equation:
Cash advance = Invoice amount × (1 – Discount rate)
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.
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.
Disclaimer: Swoop Funding LLC (“Swoop”) is a financial technology platform and commercial finance broker, not a lender. Swoop does not provide loans or make credit decisions. We match US-based firms with third-party lenders, equity funds, and grant agencies. All financing is subject to lender credit approval and the specific terms and conditions of the funding provider.
Broker Compensation Disclosure: Swoop provides its platform and matching services to applicants at no direct cost. We receive compensation in the form of a commission or referral fee from the finance providers in our network upon successful placement. This compensation may vary by provider and product. In certain instances, the commission paid to Swoop may influence the interest rate or terms offered by the lender, which can affect the total amount payable under your agreement.
Credit Authorization & FCRA Notice: By submitting an application or registering an account, you provide “written instructions” to Swoop under the Fair Credit Reporting Act (FCRA) to obtain your personal and/or business credit profile from consumer reporting agencies. This information is used solely to evaluate your eligibility for financing and to match you with appropriate lenders in our network.
State-Specific Disclosures:
Florida & Utah: Swoop complies with state commercial financing disclosure laws regarding the transparency of terms for non-real estate secured commercial transactions.
Entity Information: Swoop Funding LLC is a Delaware limited liability company. US Headquarters: 43 W 23rd St, New York, NY 10010, United States. Contact: hello@swoopfunding.com
General Terms: Applicants must be 18 years of age or older. All firms must be registered and operating within the United States. SBA loans are issued by private lenders and guaranteed by the U.S. Small Business Administration; Swoop is not a government agency. Please review our Terms of Use and Privacy Policy for full details.
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