Invoice Factoring Calculator

Are you considering invoice factoring to enhance your business’s cash flow but need clarification on the costs involved? The Factoring Companies Canada Invoice Factoring Calculator is here to help. With just a few clicks, receive an instant estimate of your factoring fees based on the value of your invoice and the number of days until it’s expected to be paid.

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How Quickly Can I Get Paid?

Some factoring companies can deposit your advance in your bank account on the day you submit your invoice. It’s very quick! However, if this is your first time factoring, there are a few things that will impact your timeline:

  • Quote: Your next step is to request a formal quote. During this stage, we’ll match you with a factoring company that meets your needs and offers competitive rates. Generally speaking, you should expect a response within one business day, though most will reach out to you immediately.
  • Approval: Once you’re satisfied with your quote, you’ll fill out a more detailed application. Most businesses qualify, though the factoring company will need some basic information about your business and clients. If you’re prepared and responsive, it’s possible to receive approval on the day you apply. However, it’s more common for the approval process to take anywhere from a couple of days to around a week. Your factoring company will work with you to expedite the process, especially if you need your first advance quickly.
  • Invoice: Once your account is active, you can typically begin submitting invoices to your factoring company right away. Most deposit funds via ACH, which means the cash hits your bank account in about two business days. However, some offer expedited service, including same-day or next-day payments.

This means that if this is your first time factoring, you might be able to receive your first advance in as little as a couple of days. However, you should clarify the timeline with your factoring company before you begin. 

How the Invoice Factoring Calculator Works

Our Invoice Factoring Calculator simplifies the initial step in understanding the potential cost of factoring services. By inputting the total invoice amount and estimated payment timeframe, the calculator applies industry-standard rates to offer an initial fee estimate. It’s a quick and straightforward method to gauge the financial implications of choosing invoice factoring for your business needs.

Step 1: Enter the Total Value of the Invoices You’d Like to Factor

Invoice factoring is flexible, and you do not need to factor all your invoices. While some businesses do, you can also factor a single invoice or factor several. Consider the total value of all the invoices you might like to factor and enter the figure in the “Sum of Invoice Value $” field.

You can experiment with different figures to see how your fees change. Generally speaking, the more you factor, the more you save.

Step 2: Enter the Days Until Payment is Expected

In the “Invoice Payment Term” field, enter the total number of days until you expect to receive payment. Most businesses that leverage factoring send their invoices the day work is completed or goods are delivered. If this is the case for you, try using your standard payment terms. For instance, if you give “net 30” terms, meaning your clients have 30 days to pay their invoice, you’ll enter “30” in the field. 

If you’re trying to calculate your total fees for invoices that were generated at different times and, therefore, have different due dates, calculate your average first and input that. Conversely, you can calculate each invoice independently, though the calculator will not take into account any volume discounts you may otherwise qualify for. 

Step 3: Review Your Instant Factoring Fee Estimate

In the “Overview” section, you’ll see two fields: “Factoring Fee %” and “Total Factoring Fee.” The corresponding figures are dynamic and automatically adjust each time you change a value or days figure.

  • Factoring Fee %: The percentage of the invoice’s value that will be paid to the factoring company.
  • Total Factoring Fee: Your total estimated cost, as calculated by multiplying your invoice value by the Factoring Fee %.

Understanding Factoring Fees

Factoring fees are essentially the cost a factoring company charges for providing you with advance payments on your outstanding invoices. These fees can vary significantly based on several factors, including:

  • Invoice Amount: Larger invoices or a higher value of invoices overall might attract lower percentage fees due to volume.
  • Advance Rates: Factoring companies can typically advance anywhere from 60 to 95 percent of an invoice’s value. However, you might pay a little more for a higher advance rate.
  • Payment Turnaround Time: The longer it takes for your client to pay, the higher the fee might be.
  • Industry and Risk: Certain industries or clients might be deemed riskier, affecting the fee.
  • Factoring Agreement: Some factoring companies reduce their rates when businesses sign a long-term agreement.
  • Factoring Type: There are two primary types of factoring: recourse and non-recourse. With recourse factoring, your business is responsible for ensuring the factoring company is paid if your client doesn’t pay an invoice. With non-recourse factoring, the factoring company absorbs the loss. The latter offers protection from bad debt but costs a little more.
  • Additional Fees: Some factoring agreements may also include fees for things like client credit checks or processing.

Our calculator uses average rates to provide an estimated fee, giving you a baseline understanding of the potential costs involved. You can learn more about how factoring fees work in “Calculating the Cost of Factoring: A Detailed Guide.”

Limitations of the Factoring Calculator

While our Factoring Calculator is an excellent tool for getting an initial estimate, it’s important to note its limitations:

  • Industry-Specific Rates: The calculator does not account for specific industry rates, which can significantly influence the factoring fee.
  • Risk Evaluation: Factors consider the creditworthiness of your clients, and higher-risk invoices might incur higher fees.
  • Advance Amounts: The percentage of the invoice amount that the factoring company advances you upfront varies and impacts the overall fee structure.
  • Factoring Type: Your estimates are based on recourse factoring. If you think you might prefer non-recourse, add one to two percent to your Factoring Fee %.
  • Additional Fees: Factoring companies differ significantly in this regard. Some don’t charge any at all, while others charge several.

Beyond the Calculator: Requesting a Detailed Quote

For a comprehensive understanding of how invoice factoring can benefit your business and a precise calculation of factoring fees, requesting a detailed quote is essential. Your factoring company will consider all variables – from industry specifics to risk assessments and advance amounts – to provide you with a tailored factoring solution that meets your business’s unique needs. Request a detailed factoring quote now.

CONTACT US FOR A
CUSTOM FACTORING QUOTE!

PREFER TO TALK?  You can reach us at 1-866-477-1778

Get an instant factoring estimate

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Factoring results estimation is based on the total dollar value of your invoices.
The actual rates may differ.

CONTACT US FOR A
CUSTOM FACTORING QUOTE!

PREFER TO TALK?
You can reach us at
1-866-477-1778