Our Fees

How Much Does Invoice Factoring Cost?

Unlike a business loan that involves a monthly payment based on an annualized interest rate, invoice factoring cost is priced per transaction. In a factoring transaction, your business sells its invoices to Business Finance Corporation at an agreed-upon discount from the face amount of the invoice. Typical factoring discounts range from 3%-5% for 30 days.

At Business Finance Corporation, an invoice that is not paid within 30 days will accrue daily fees at 1/30th of the factoring rate per day. For instance, if your factoring discount rate is 3½%, and the invoice does not pay within 30 days from the date we fund the invoice, the daily fee would be 1/30th of 3½ % or .1167% per day. On a $1,000 invoice, the amount would be $1.17 per day.

How Do We Calculate Discount Rates?

The factoring discount rate is determined by a number of variables, such as:

• Type of business you are in (for example, construction is more expensive than manufacturing)
• Number of monthly invoices to be factored
• Dollar amount of each invoice
• Credit quality of your clients and their payment history
• Other credit risks

In addition to the per transaction discount rate, Business Finance Corporation may charge an additional monthly fee on accounts that require specialized services or customized financing.

Are you contemplating taking out a merchant cash advance loan? Don’t fall into the high interest trap! Learn more how these loans can be a bad deal all the way around for your business.