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.

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