Factoring Cost Calculator
Enter an invoice amount, the quoted fee percentage and your estimated wait for customer payment. This calculator shows the fee in dollars and scales that percentage to a 365-day basis.
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How this is calculated
simple annualized fee (%) = fee (%) × 365 ÷ days you'd wait
For a $2,200 invoice, a 3% fee is $66.00, leaving $2,134.00 before reserve holdbacks and other charges. With a 30-day wait, the simple annualized fee is 3 × 365 ÷ 30 = 36.5%. The fee on this invoice remains 3%; 36.5% is the yearly comparison figure.
This calculation uses the invoice amount as its basis. It excludes advance amounts, reserve release timing, other charges and compounding. APR relates actual received and repaid amounts to their timing; this simple fee calculation does not produce a financing APR or an up-front funding quote.
Compare factoring companies
- OTR Solutions — no-recourse factoring, trucking-specific
- Bobtail — flat-fee factoring
FAQ
What is invoice factoring?
You sell an unpaid invoice to a factoring company, which pays an agreed advance and collects from your customer. Fees, any reserve held back, and the timing of the remaining payment depend on your agreement.
Recourse vs. non-recourse factoring — what actually changes?
With recourse, unpaid invoices may be charged back to you. Non-recourse covers qualifying nonpayment under the agreement. Some programs cover customer bankruptcy but exclude delivery disputes; eligible customers, exclusions and your obligations vary by provider. See OTR's contract qualification and Bobtail's guide to coverage limits.
How can I compare factoring with a bank line of credit?
Compare written quotes for the same cash need and payment window: total charges, the amount available up front, payment timing and eligibility conditions. Approval and funding terms depend on the provider and your business. This calculator scales one invoice fee; it cannot rank complete financing offers.
How do I actually compare factoring offers?
Check the invoice fee and whether it increases with payment delays, the advance rate and reserve release, plus monthly minimums, transfer fees and other charges. This tool uses only the invoice amount, fee percentage and waiting period you enter. OTR's contract guide explains why reserves, funding conditions and extra fees matter.