Factoring Advance Amount Calculator

Work out factoring advance amount instantly with clear inputs, formula shown and shareable results.

About Factoring Advance Amount Calculator

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.

Formula

Factoring

Net advance = invoice × advance rate - invoice × fee; annualised cost = fee/advance × 365/days

Worked example

With the default values below, Factoring Advance Amount Calculator returns Cash Received Today of $7,880,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Invoice Valueminimum 0: 10,000,000
Advance Rateaccepts 30–95 %: 80 %
Factoring Feeaccepts 0–6 %: 1.2 %
Credit Period In Daysaccepts 1–180: 60

Results

Cash Received Today: $7,880,000.00
Gross Advance: $8,000,000.00
Factoring Fee: $120,000.00
Annualised Cost Of Funds: 9.1250%

Step by step

1Values used
2Factoring
3Cash Received Today= 7,880,000.00
4Gross Advance= 8,000,000.00
5Factoring Fee= 120,000.00
6Annualised Cost Of Funds= 9.1250

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation or tax into account.
Figures are rounded for display to 4 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
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.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

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.

Frequently Asked Questions

Is factoring the same as invoice discounting?

Factoring usually includes collection and may be non-recourse; discounting leaves collection and risk with the seller.

Why is the retention held back?

To cover dilution from credit notes, disputes and short payments, which are settled at final collection.