Invoice Factoring Calculator
Explore how invoice amount, an assumed advance rate, and customer payment time affect one simplified educational factoring example.
How This Estimate is Calculated
This educational calculator applies the approved stepped fee schedule to the face amount of the invoice based on the selected number of days until customer payment.
| Payment Timeframe | Educational Factoring Fee |
|---|---|
| Days 1–30 | 2.75% |
| Days 31–40 | 3.75% |
| Days 41–50 | 4.75% |
| Days 51–60 | 5.75% |
| Days 61–70 | 6.75% |
| Days 71–80 | 7.75% |
| Days 81–90 | 8.75% |
The fee increases by 1.00% at the beginning of each additional 10-day period or portion thereof.
Understanding the Advance and Reserve
In this simplified example, the Initial Advance is the selected percentage of the invoice face amount. The remaining balance is the Initial Reserve. The reserve is not an additional cost; it is the portion of the estimated purchase price not included in the initial advance. The Estimated Reserve Release is the initial reserve minus only the modeled factoring fee.
Important Assumptions
This model assumes:
- The invoice is paid in full within the selected timeframe (up to 90 days).
- No disputes, dilution, offsets, chargebacks, credits, or adjustments from your customer.
- No additional fixed fees, wire fees, verification fees, minimum-volume fees, or early termination fees.
- No other provider charges or contractual deductions from the reserve.
Calculator vs. Actual Proposal
This calculator provides a simplified educational example. It is not a quote, offer, approval, commitment, or representation of actual provider terms. Actual factoring agreements may calculate fees differently. Providers may use different initial and periodic discount rates, different advance percentages, different reserve structures, and may include ancillary charges. The provider's actual agreement controls.
Broker Disclosure
LIEquity is an independent commercial factoring broker. We are not a lender, funding source, or underwriter. Factoring providers perform their own evaluation and make all final approval decisions, establish terms, and provide funding.
Related LIEquity Resources
Frequently Asked Questions
How does the invoice factoring calculator work?
Enter an invoice amount, select an educational advance rate, and choose the number of days until customer payment. The calculator applies the displayed fee period and shows the resulting advance, reserve, fee, reserve release, and total proceeds under its simplified assumptions.
Is this calculator a factoring quote?
No. It is a simplified educational example, not a quote, offer, approval, commitment, or representation of actual provider pricing or terms.
Why is the factoring fee calculated on the invoice amount?
The approved educational model applies the fee percentage to the invoice face amount, not only to the initial advance. Actual agreements may calculate fees differently.
What is the initial reserve?
The initial reserve is the portion of the estimated purchase price not included in the initial advance. It is not an additional fee.
Why does the fee change at days 31, 41, and the later boundaries?
The approved model adds 1.00% at the beginning of each additional 10-day period or portion after day 30. It does not interpolate the fee daily.
What happens if the customer pays after 90 days?
The calculator does not estimate pricing beyond 90 days. Actual timing and fee treatment depend on the provider's agreement.
Will a provider use the same advance rate and fee schedule?
Not necessarily. Providers may use different initial fees, periodic fees, advance rates, reserve structures, minimums, additional charges, and timing conventions. The provider's actual agreement controls.
Does LIEquity determine the provider's final pricing?
No. LIEquity is an independent commercial factoring broker. A provider performs its own evaluation, establishes its terms, and makes all final approval and funding decisions.