Work out factoring advance amount instantly with clear inputs, formula shown and shareable results.
Factoring sells receivables outright at a discount, advancing most of the value immediately and releasing the retention on collection. Annualising the fee over the credit period is the only way to compare it with a working capital loan.
Factoring
Net advance = invoice × advance rate - invoice × fee; annualised cost = fee/advance × 365/days
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.
Factoring usually includes collection and may be non-recourse; discounting leaves collection and risk with the seller.
To cover dilution from credit notes, disputes and short payments, which are settled at final collection.