What it costs
How to read a factoring offer like the people who write them
The rate is only one of the numbers that decide what you pay. How the fee is counted, what you get upfront and what the contract says matter just as much. We'll walk you through it in six short steps.
Your guide, step by step Tap any step, or scroll down to go in order ↓
- Where $50,000 goesThe 3 numbers
- Same 2%, different billHow they count the days
- 2% of what?Full invoice or cash in hand
- The extrasFees outside the rate
- The slow monthMinimums and terms
- Lower rate, higher billCompare any two offers
Already have an offer, or already factoring? Skip to the calculator and check yours ↓
Step 1 of 6
Where your $50,000 goes
One $50,000 invoice. The funder advances 90% and charges 2% for 30 days. Your customer pays on day 30. Every example on this page starts here.
You get $45,000 now and $4,000 on day 30. The invoice cost you $1,000.
The rate
Usually 1% to 5%. On its own it tells you little, as the next two steps show.
The days
The fee keeps running until your customer pays. Depending on how the funder counts days, a 38-day payer can cost twice a 30-day payer.
The advance
Your cash today, usually 80% to 95%. The rest comes back, minus the fee, when your customer pays.
Ask every funder: "What's the rate, how many days does it cover, and what's my advance?"
Step 2 of 6
Same 2%, different bill
Same $50,000 invoice. Two funders, both charge 2%. This time your customer pays 8 days late, on day 38.
Funder A charges you for 2 full months because day 31 starts a new one. Those 8 late days cost you $733 more.
Ask every funder: "If my customer pays a few days late, do you charge me for a whole extra month?"
Step 3 of 6
2% of what?
Same $50,000 invoice, paid on time. Both funders charge 2% and give you $45,000 upfront. The difference is what they take the 2% of.
Same 2%, same cash in your hands. Funder A costs you $100 more on every invoice.
Ask every funder: "Is your fee on the full invoice, or only on the cash you give me?"
Step 4 of 6
The extras
Same $50,000 invoice, same 2%. Funder A charges the 2% and nothing else. Funder B adds a wire fee, a credit check on your customer and a monthly service fee.
Same 2%. Funder B costs $215 more, and none of it shows up in the rate.
Ask every funder: "What do I pay besides the discount fee? Please send me the full fee schedule in writing."
Every fee you might see, and what to ask about each
Most funders use only some of these. Knowing the names lets you read any offer with confidence.
- Discount feeThe main charge, counted in blocks, steps or days (step 2).Ask: How is it counted, and how many float days apply?
- Advance rateThe share you get upfront, usually 80–95%.Ask: Is it the same for every customer, or lower for some?
- ReserveThe part held back until your customer pays. You get it back, minus fees.Ask: How fast is it released, and can it be held against other invoices?
- Setup or due-diligence feeA one-time fee to open the account. Often negotiable.Ask: Is it waived, or refunded if I'm not approved?
- Monthly minimumA charge if you factor less than an agreed amount (step 5).Ask: What exactly do I owe in a slow month?
- Unused-line feeA charge on the part of your credit line you don't use.Ask: Is there a charge for unused availability?
- Transfer feesPer ACH or wire. Small, but they add up.Ask: What does each ACH and wire cost?
- Lockbox or service feesMonthly fees for handling your customers' payments or account access.Ask: Are there any monthly fees beyond the discount?
- Credit-check feesCharged when the funder checks a new customer of yours.Ask: Is there a fee per customer check?
- Misdirected-payment feeApplies if your customer pays you instead of the funder and you don't pass it along on time. Easy to avoid once you know the rule.Ask: What's the fee, and how many days do I have to forward a payment?
- Interest-based pricingSome larger accounts are priced like a credit line: interest on the cash you've received, tied to the prime rate, plus a small monthly fee. It can cost less at higher volume.Ask: What's the rate, and which fees come on top of it?
- Early termination feeWhat it costs to leave before the term ends.Ask: How is it calculated, and does it drop over time?
Step 5 of 6
The slow month
Same two funders, same 2%. One line in the contract is different: Funder B has a $50,000 monthly minimum. Then you have a slow month and factor one $20,000 invoice.
Funder B costs $600 more in the month you needed the least help.
Ask every funder: "What do I owe in a slow month, and what does it cost to leave early?"
Other contract terms to know before you sign
Step 6 of 6
Lower rate, higher bill
Same $50,000 invoice, paid on day 30. Funder A quotes 1.8% plus a $150 monthly service fee. Funder B quotes 2% with no extras.
The lower rate costs $50 more. Compare the total on one real invoice, not the rate.
Ask every funder: "What's my all-in cost on this one invoice, including every fee?"
Same invoice, same days
Run one real invoice through each offer, using how long that customer actually takes to pay.
Add the extras and a slow month
Every fee outside the rate, plus what you'd owe in your slowest month.
Check the exit
Term, renewal window, notice period and exit fee. Flexibility is worth money too.
Already have an offer? Send it to us. We'll go through it line by line, show you what each line means and what to ask about, free, whether or not you work with us. Upload it for a free review → No offer yet? Send one invoice and we'll price it →
Examples on this page use typical market figures to show how pricing works. They aren't offers or any funder's actual pricing.
Now check yours
What is your offer really costing you?
You've seen how the rate hides the real cost. Run your own offer, or your current deal, through the same math in 4 quick steps.
Easiest: let us do it
Send us your offer or current agreement. We'll do the math and read the fine print.
- Every fee, found and priced, including the ones buried in the contract.
- The terms a rate never shows: recourse, auto-renewal, guarantees and liens.
- What you'll actually receive, and what comes out of your first funding.
- What's negotiable, and who else would fund you.
Back to you within one business day. Rather talk? (727) 353-2577
What this doesn't include: recourse (unpaid invoices coming back to you), personal guarantees, liens, auto-renewal and notice windows, requirements to factor every invoice, reserve release timing, chargebacks, ineligible invoices and concentration limits, and fees or payoffs taken from your first funding. These live in the contract, which is why we read it for you. Assumes prime at 7.00% (Wall Street Journal prime, Oct 13, 2026) and 3 float days when none are listed. Results are estimates from what you enter, not offers. Your numbers stay in your browser until you enter your email. Printable: the 6 questions to ask every funder →
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