Effective cost calculator
Convert a factoring fee and holding period into a rough annualized cost estimate.
Estimate only. Estimate only. This calculator runs locally in the browser, does not collect inputs, does not send requests, and does not represent an offered or promised rate.
Result will appear here.
Enter values and calculate. No inputs are transmitted.
Input limits
- Fee rate must be between 0 and 25 percent for this estimate.
- Days outstanding must be between 1 and 365.
Example calculation
- 3.00% fee
- 30 days outstanding
- Rough annualized cost: about 36.50% before compounding and other charges
What this estimate does not include
- Legal APR or state disclosure methodology.
- Compounding, tier changes, or fee resets.
- Minimum charges, reserves, wires, default fees, or termination fees.
- Tax or accounting treatment.
Questions to ask a factoring company
- What fee period applies if the invoice pays late?
- Are disclosure calculations provided under state law?
- Which charges are outside the quoted factoring fee?
- Is the fee based on invoice amount or advance amount?
FAQ
Is annualized cost the same as APR?
No. This is a simplified estimate and may not match legal disclosure methods.
Why annualize?
It helps compare time-based cost, but it should not replace contract review.
Sources
- Commercial Financing Disclosures - California Department of Financial Protection and Innovation. Accessed 2026-05-19.
- Small Business Lending Rulemaking - Consumer Financial Protection Bureau. Accessed 2026-05-19.
- International Factoring Association - International Factoring Association. Accessed 2026-05-19.
Financial disclaimer. This page is educational only and is not financial, legal, tax, accounting, or credit advice. Factoring terms vary by provider and contract. Read the full disclaimer.