What factoring really costs. Advance, fee and net cash in seconds.
Enter your monthly invoices and the advance rate and fee from a factoring quote to see the cash you get up front, the rebate when your customers pay, and the effective cost. Nothing here is a Globus quote.
Cash up front and total cost
For B2B invoices owed by commercial or government customers: trucking and freight, staffing, manufacturing, distribution, oilfield and B2B services. The starting values are examples only; replace them with the terms on your quote.
The advance rate and fee are yours to fill in from a quote, or try a few values to see how much the cost moves when customers pay faster or slower. Factors set actual advance rates, fees, reserves and terms at underwriting.
CPAs, dispatchers and business advisors
Clients waiting 30 to 90 days to get paid?
They can request options on their own at /go/factoring-apply. We share each request with factoring companies that fit the industry and invoice volume, and pass along each factor’s own disclosures unchanged.
Invoice factoring questions
How is the cost of invoice factoring calculated?
Most factors charge a fee as a percentage of the invoice face value for each period the invoice is outstanding, often quoted per 30 days. Some charge the full period once it starts, others prorate by the day or by 10-day tiers. The total fee is the rate times the number of periods your customer takes to pay, plus any flat fees such as wire, ACH or monthly minimums in your agreement.
What are the advance and the reserve?
The advance is the share of the invoice the factor pays you up front, usually within a day or two of verifying the invoice. The rest is held as a reserve. When your customer pays the factor, the reserve is released back to you minus the factoring fee; that payment is often called the rebate.
What is the difference between recourse and non-recourse factoring?
With recourse factoring you must buy back or replace an invoice your customer does not pay, so pricing is usually lower. With non-recourse factoring the factor absorbs the loss if your customer cannot pay because of a covered credit event, such as insolvency, which usually costs more. Read the agreement closely: non-recourse rarely covers disputes over the work or goods.
Is the annualized cost the same as an APR?
No. The annualized figure here only expresses the fee you entered as a yearly rate on the cash advanced, so you can compare factoring with a line of credit or loan. It is not an APR disclosure. Some states require factors and other providers to give you a formal cost disclosure before you sign; rely on that document and your agreement for actual terms.
What do factoring companies usually review?
Typically an accounts receivable aging report, sample invoices, your customer list and their payment history, business formation documents and any existing liens on receivables. Because the factor is relying on your customers paying, their credit often matters more than yours. Each factor sets its own advance rate, fee and terms at underwriting.
Related: equipment loan and lease payment calculator, working capital lines, equipment financing and SBA 7(a) loans through participating lenders.
Craig Kaminski, NMLS 1417248. Globus Capital Advisors is not a lender or a licensed entity. Business-purpose commercial financing only; subject to lender underwriting; not a commitment to lend. Globus Capital Advisors, LLC, Office: 5335 Wisconsin Ave NW, Suite 440, Washington, DC 20015. Not available in California, Connecticut, Missouri, Nevada, North Dakota, Texas, Vermont or Virginia. No upfront fees are charged to request financing. Calculator results are illustrative math based on the inputs you enter; nothing on this page is a rate, fee or term quote or an APR disclosure, and actual advance rates, fees and terms are set by each factoring company. Not tax, legal or accounting advice.