Invoice financing costs are the fees associated with using invoice financing to access working capital. These costs can include interest, origination fees, and other administrative fees. The exact cost of invoice financing will vary depending on the lender and the terms of the loan.

Common Fees

 1. Interest: An interest fee in Invoice Financing is a fee charged by the lender for providing the financing. This fee is typically calculated as a percentage of the total invoice amount and is paid by the borrower to the lender.

2. Origination Fees: An Origination Fee is a one-time fee charged by an invoice financing company to cover the cost of setting up and administering the loan. This fee is typically a percentage of the total loan amount and is usually paid upfront.

3. Administrative Fees: Administrative fees are charges that are added to an invoice financing agreement to cover the costs of processing and managing the loan. These fees can include setup fees, origination fees, and other administrative costs associated with the loan.


Invoice financing fees depend on several factors, such as:

The table below gives an idea of the costs with different invoice values.


The Cost of Invoice Factoring

Factoring fees, sometimes referred to as discounting rates, are typically a percentage of the value of sales invoices financed. This rate can range from 13% and may be a flat fee or vary depending on how long an invoice remains unpaid. Factors such as the volume of invoices, the average value of invoices, customers creditworthiness, industry sector and average number of days customers take to pay can all affect the factoring rate. Initial advance percentages may also vary with the factoring provider. It is important to consider all charges when comparing quotes and preparing a costbenefit analysis. Some companies include most or all their costs in their factoring rate, while others charge separately for additional services and expenses.

In conclusion, invoice factoring can be advantageous for any business that issues a sufficient amount of sales invoices. To accurately assess the full extent of these advantages, all the points mentioned above must be taken into consideration.

If your business is booming and you can’t keep up, or you’re waiting on clients to pay, Filthy Rich Idea can help. Fill out our online application or get in touch with us at 888-369-4332 to find out more about invoice factoring and how it can improve your company’s cash flow.