Factoring Cost Calculator: Compare Offers, Fees and the Cost of Leaving

What each number means

Cost per month is everything the factor keeps in a month: the factoring fee, any top-up to reach a monthly minimum, per-invoice fees, payout fees, other fixed fees and fuel advance fees. It doesn't include the reserve. The reserve is your money, held until the broker pays, and it comes back to you.

Cost per year is the monthly cost times 12. A gap of half a point on $40,000 a month adds up to $2,400 a year.

Effective cost is the monthly cost divided by the invoices you factor. If it's well above the headline rate, the fees are doing more damage than the rate.

Annualized cost (APR-style) treats the cost as interest on the money advanced to you, which you get about as many days early as your brokers take to pay: monthly cost ÷ money advanced × (365 ÷ average days to pay). It's a simple annual rate with no compounding. Factoring isn't a loan, so no factor will quote you an APR, but it helps when you're weighing factoring against a line of credit, a credit card or quick pay.

Cents per mile is the monthly cost divided by the miles you run in a month. It lets you set factoring next to fuel, insurance and your truck payment in the same unit you use to price loads.

Cost to leave is what you'd owe for walking away at the end of the stay you entered, if that's before the contract term ends: the early termination fee, plus the monthly minimum for every remaining month if your contract bills it (tick the box only if yours says so). If your stay is as long as the term or longer, or the contract is month-to-month, the cost to leave is $0.

Total incl. leaving is the monthly cost times the months you expect to stay, plus the cost to leave. The "Lowest total" badge goes to the offer with the smallest total. A quote that's cheaper per month can still lose once a long term and a termination fee are counted.

Notice period shows the fees you'd pay this offer during the notice window if you gave notice today. It isn't added to the total, because you can avoid it by giving notice on time. Miss the window on an auto-renewing contract and you may be locked in for another full term, so put the deadline in your calendar.

How tiered rates are counted

With a tiered (time-based) rate, the base rate covers the first block of days. Each extra block, or part of one, adds the step rate. Example: 2.5% for 30 days, plus 0.5% for every extra 15 days.

• Paid in 25 days: 2.5%
• Paid in 40 days: 10 days over, so one step: 3.0%
• Paid in 50 days: 20 days over, so two steps: 3.5%

Contracts word this differently. Some count from the purchase date, some from the invoice date, and some use fixed brackets like "31–45 days". Read your tier table and make sure the calculator matches it.

Worked example (the numbers filled in above)

Both offers use $40,000 a month, 16 invoices, 40 days to pay, 4 payouts, 2 fuel advances of $500, 10,000 miles and a 12-month stay. These are made-up numbers.

Offer B is $25 a month cheaper, but if you expect to leave after a year, its termination fee makes it $450 more expensive. If you'd stay the full 24 months, B wins. That's the trade-off this calculator is built to show.

This is an estimate

This calculator does simple math on the numbers you enter. It doesn't know any company's real pricing, and it can't see fees your contract lists but your quote leaves out. Chargebacks under recourse, reserve release delays and buyout costs aren't included. Use it to compare quotes, then confirm every fee and every exit term in writing before you sign. This is general information, not financial advice.

Keep reading

• Factoring company comparison: published rates and terms, with sources
• Trucking factoring rates and fees: what you actually pay
• Recourse vs. non-recourse factoring
• Factoring for a new authority: the first six months
• Factoring contract red flags, and how to leave a factoring company