How much does invoice factoring cost?

NerdWallet says factoring companies often charge a flat 1% to 5% of the invoice value per month. Extra fees may include service fees, monthly minimum fees and origination fees, so ask for all of them in writing.

How much of the invoice do I get up front?

It depends on the company. NerdWallet says the factoring company advances part of the invoice amount, sometimes up to 90%. The rest, minus fees, comes when your customer pays.

Is invoice factoring a loan?

No. You sell your unpaid invoices to a factoring company at a discount, and it collects from your customer. We show an estimated APR only so you can compare its cost with a loan.

Why does the APR look so high when the fee is only a few percent?

The fee is charged on the full invoice but you only get the advance, and only for the days until your customer pays. A 3% fee for 30 days works out to well over 30% a year.

What APR range does factoring usually fall in?

NerdWallet lists invoice factoring or financing at 10% to 79% APR, as of September 2026.

Invoice factoring calculator

Enter the invoice, the advance rate, the fee per 30 days and how long your customer takes to pay, and see the cash you get now, the fee in dollars and an estimated APR.

By Business Funders editorial teamUpdated Oct 20, 2026

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Example numbers. Change them to match a quote you have.

Invoice amount

Advance rate

The share of the invoice paid to you now.

Factoring fee per 30 days

A percent of the full invoice for each 30 days it is unpaid.

Days until your customer pays

days

Cash now

$21,250

Then $2,625 more when your customer pays, after the fee

Fee in dollars: $1,125
Estimated APR: 42.9%

For comparison: borrowing the same $21,250 for 45 days at 10.98% APR, a bank small-business average for owners who qualify, costs about $288 in interest.

Find my funding

Your cash amount carries into the quiz, already filled in.

Fee counted for the exact days. If your contract charges for each started 30-day period, round the days up. Extra fees are not included. An estimate, not an offer.

Where the $25,000 goes

How the invoice is split
Invoice value	$25,000
Advance paid to you now (85%)	$21,250
Factoring fee (3% x 45 / 30 days)	$1,125
Paid to you when your customer pays	$2,625
Total you receive	$23,875

How the math works

Cash now = invoice x advance rate. A $25,000 invoice at an 85% advance pays $21,250 now.
Fee = invoice x fee per 30 days x (days until paid / 30). At 3% for 45 days that is 4.5% of $25,000, or $1,125.
Paid later = invoice minus cash now minus the fee.
Estimated APR = fee / cash now x 365 / days. It is the yearly cost of the cash you had in hand, for the days you had it.

NerdWallet's own example uses a $10,000 invoice, an 85% advance and a 3% fee, so you receive $9,700 in total. This calculator uses a 365-day year, so its APR on that example comes out a little higher than an estimate made on a 360-day year.

Read how invoice factoring works, or compare it with other quotes in the offer comparer.

Common questions

Sources

NerdWallet, Invoice Factoring (advances up to 90%; fees 1% to 5% of the invoice value per month; worked example, updated Oct 17, 2025), accessed Oct 20, 2026
NerdWallet, Business loan interest rates (invoice factoring or financing 10% to 79% APR; bank small-business loan 6.37% to 10.98%), accessed Oct 20, 2026