Factoring Pricing: Simple, Transparent Rates

Invoice Factoring Rates: How Pricing Works

Factoring pricing comes down to two numbers: an advance of 70%–90% of each invoice and a factoring fee of 1%–3% per period. You see the fee range before you factor, and you add no debt to your balance sheet.

  • ✓Advance: 70%–90% of invoice face value.
  • ✓Fee: 1%–3% per period, taken from the reserve.
  • ✓Approval the same day; new accounts close in 2–5 days.
70%–90%Advance on invoice face value
1%–3%Factoring fee per period
Same DayApproval on a complete application

Estimate the rate for your invoices

Enter your volume, payment terms and customer profile for an estimated fee inside the published 1%–3% range.

Executive Summary: Invoice Factoring Rates

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What it is: Invoice factoring rates are defined as the two terms that set what factoring costs you: the advance rate, the share of an invoice paid up front, and the factoring fee, a percentage of face value for each period the invoice is outstanding. The rest of the invoice sits in a reserve until your customer pays.

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The numbers: Advance rate: 70%–90% of invoice face value · Factoring fee: 1%–3% per period · Approval: same day · Closing: 2–5 days · Funding: same day or 24 hours once your account is active · Estimated minimum monthly volume: $50,000.

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Key constraints: Your customers’ credit, your monthly volume, invoice terms and recourse or non-recourse structure set where you land in each range. Your quote shows your fee range before you factor. Only B2B invoices qualify.

The Fast Facts on Invoice Factoring Rates

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How much does invoice factoring cost?

The short answer is 1% to 3% of the invoice face value for each period the invoice stays unpaid. On a $10,000 invoice at 2%, the fee is $200. Your quote sets the rate inside that range; see invoice factoring for how the advance works.

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How do factoring fees and reserves affect what I receive?

The short answer is that you receive the advance first and the reserve minus the fee later. At an 85% advance and a 2% fee on $10,000, you get $8,500 up front and $1,300 when your customer pays.

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What sets my factoring rate?

The short answer is your customers’ credit, your monthly volume, your invoice terms and the recourse structure. Stronger customers and higher volume move you toward the low end. Check the eligibility requirements before you request a quote.

Cash flow gaps invoice factoring can close

You cannot compare quotes

One offer quotes a daily rate, another a monthly rate. Without the same terms side by side, the cheaper option is hard to spot.

Net-60 terms stretch your cash

A large customer pays in 60 days, and payroll comes every two weeks. Each day the invoice sits unpaid ties up money you already earned.

High-cost debt looks faster

A merchant cash advance arrives quickly, then daily debits take a cut of every deposit. Factoring pricing ties the cost to the invoice.

How factoring rates are calculated

Advance rate explained

The advance rate is the share of an invoice the lending partner pays you up front, 70%–90% of face value. Stronger customer credit and shorter terms earn advances toward the top of the range.

Fee per period explained

The fee is a percentage of face value for each period the invoice is outstanding, 1%–3%. A flat factoring rate charges once; a tiered factoring rate rises as the invoice ages. Your agreement states which applies.

Recourse and non-recourse pricing

Under recourse, you buy back an invoice your customer does not pay. Non-recourse covers nonpayment for a reason the agreement covers, such as your customer’s insolvency, and prices toward the high end. Compare them in recourse and non-recourse factoring.

How the factoring fee is applied

Taken from the reserve

The lending partner holds the reserve, the part of the invoice not advanced. When your customer pays, it deducts the fee and releases the rest to you.

Charged on face value

The fee applies to the full invoice amount. A 2% fee on a $10,000 invoice is $200, whatever the advance rate.

Disclosed before you sign

Your quote shows the fee range before you factor. Some of the seven states, including New York, Florida and Georgia, have commercial financing disclosure laws that require cost disclosures on certain transactions.

How to get funded with invoice factoring in 3 steps

1

Request your quote

Enter your monthly volume, invoice size and terms in the quote form. An IFXI specialist reviews your request and forwards it the same day; see how it works.

2

Approve & fund

The lending partner verifies your invoices and checks your customers’ credit. Approval comes the same day, your account closes in 2–5 days, and you receive 70%–90% of each invoice.

3

Reserve rebate

When your customer pays, the lending partner deducts the 1%–3% fee from the reserve and releases the rest to you.

How money moves in invoice factoring: you request a quote, an IFXI specialist forwards it, the lending partner advances 70% to 90% of the invoice, your customer pays the lending partner, and you receive the reserve minus a 1% to 3% fee.YouIFXI specialistLending partnerYour customer1. Quote request2. Forwarded same day3. Advance of 70%–90%You invoice as usual4. Pays the lending partner

Funding timeline for invoice factoring

StageTypical Timeframe
Quote request submittedDay 0
ApprovalSame day on a complete application
Account setup and UCC-1 filing2–5 days to close
Funding on an active accountSame day or within 24 hours
Reserve releasedAfter your customer’s payment clears, minus the fee

Timeline notes for invoice factoring

  • ✓The fee is 1%–3% per period, and you see the range before you factor.
  • ✓The advance is 70%–90% of invoice face value.
  • ✓The lending partner files a UCC-1 financing statement when your account opens.
  • ✓Your customers pay the lending partner under a Notice of Assignment.
  • ✓Estimated minimum monthly volume: $50,000.

Who qualifies for invoice factoring and what you need

RequirementWhat qualifiesNotes
Invoice typeB2B invoices for delivered goods or completed workConsumer invoices do not qualify.
Customer creditCommercial customers with acceptable creditStronger customers earn better rates.
Invoice ageCurrent invoicesInvoices past 90 days usually do not qualify.
Existing liensNo UCC lien from another lender on your receivablesA tax lien gets a case-by-case review and does not rule you out.
VolumeEstimated $50,000 a month minimumNo maximum.
Your creditNo minimum credit scoreThe application authorizes business and personal credit reports.

Quote documents for invoice factoring

  • ✓Accounts receivable aging report.
  • ✓Sample invoices and proof of delivery.
  • ✓Customer list with payment terms.
  • ✓Business formation documents and a voided check.

What delays funding: missing proof of delivery, disputed invoices, and an existing lien on your receivables.

Transparent Costs for Invoice Factoring Rates

What to Expect in CostsWhat Affects the Costs
Advance rate: 70%–90% of invoice face value.

Factoring fee: 1%–3% per period.

Reserve: the balance, released minus the fee when your customer pays.		Customer credit: stronger customers earn lower fees.

Monthly volume: higher volume moves you toward the low end.

Invoice terms: longer terms add periods.

Recourse: non-recourse prices toward the high end.

Worked example: a $10,000 invoice

LineAmount
Invoice face value$10,000
Advance at 85%$8,500
Reserve held (15%)$1,500
Factoring fee at 2%$200
Reserve released after your customer pays$1,300
You receive in all$9,800

Illustrative example inside the published ranges. Your quote sets your actual advance rate and fee. Read how fees add up over time in how much invoice factoring costs.

Invoice Factoring Rates vs. Bank Line of Credit vs. Merchant Cash Advance (MCA)

FeatureInvoice Factoring RatesBank Line of CreditMerchant Cash Advance (MCA)
Typical Approval SpeedSame dayEstimated 2–8 weeks1–3 days
Min. Credit Score RequirementNone: approval rests on your customersEstimated 650–700+ (owner personal)Estimated 500+ (owner personal)
Maximum Advance Rate70%–90% of invoice face valueVariable (% of collateral or assets)Estimated 70%–80% of monthly revenue
Debt Added to Balance Sheet?No: you sell a receivableYes: revolving debt liabilityYes: recorded as a liability
Hidden Fees / Covenants1%–3% per period, shown before you factorOrigination, maintenance, annual review, covenantsFactor rates, daily ACH debits, prepayment penalties (Variable/Estimated)
Best ForB2B businesses waiting on net-30 to net-90 invoicesEstablished companies with strong financials and collateralBusinesses with card sales and no invoices

When invoice factoring is not the right fit

  • ✗It costs more than a bank line on an annual basis. A 2% fee for a 30-day invoice works out to about 24% a year (2% × 12 periods); compare that with your bank line’s annual rate.
  • ✗Your customers see the arrangement. They pay the lending partner under a Notice of Assignment.
  • ✗Recourse leaves the credit loss with you. Under recourse, you buy back an invoice your customer does not pay.
  • ✗A UCC-1 goes on file. Article 9 of the UCC covers sales of accounts, so the filing can block other financing secured by your receivables.

How IFXI handles your request for invoice factoring

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No long-term contracts

The lending partner’s agreement has no long-term contract.

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Transparent fees

You see the 1%–3% fee range before you factor.

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An IFXI specialist on your request

An IFXI specialist reviews your quote request and forwards it the same day.

Funding scenarios for invoice factoring rates

Illustrative example · September 2026 · Columbus, OH

Manufacturer prices a net-30 invoice

Funding Amount
$60,000
Industry
Light manufacturing
Customer Type
Regional distributors
Funding Type
Invoice factoring
Invoice Terms
Net-30
Advance Rate
85%
The Problem

A $60,000 invoice to a distributor would not pay for 30 days, and a materials order was due.

The Solution

The lending partner advanced 85% and took a 2% fee from the reserve when the distributor paid.

Result

$51,000 advanced; $7,800 more released after a $1,200 fee.

Illustrative example · July 2026 · Dallas, TX

Staffing firm covers payroll on net-45

Funding Amount
$40,000
Industry
Light industrial staffing
Customer Type
Manufacturing plants
Funding Type
Invoice factoring
Invoice Terms
Net-45
Advance Rate
90%
The Problem

Weekly payroll came due while $40,000 in invoices sat on net-45 terms.

The Solution

Strong customer credit earned a 90% advance on the invoices.

Result

$36,000 advanced in time for payroll.

Illustrative example · May 2026 · Philadelphia, PA

Distributor compares factoring to an MCA

Funding Amount
$25,000
Industry
Food distribution
Customer Type
Restaurant groups
Funding Type
Invoice factoring
Invoice Terms
Net-30
Advance Rate
80%
The Problem

A cash advance offer would have taken a share of every deposit until repaid.

The Solution

The distributor factored $25,000 of invoices instead, with the fee tied to those invoices.

Result

$20,000 advanced; the fee came out of the reserve.

Where IFXI arranges invoice factoring

We connect B2B businesses with invoice factoring in:
Texas, Florida, New York, Illinois, Georgia, Ohio, and Pennsylvania.

Frequently asked questions about invoice factoring rates

How much does invoice factoring cost?

The short answer is 1% to 3% of the invoice face value for each period the invoice stays unpaid. Your customers’ credit, your monthly volume and your invoice terms set where you land, and you see the fee range before you factor.

The factoring fee is defined as a percentage of an invoice’s face value charged for each period the invoice is outstanding. The lending partner charges 1% to 3% per period and deducts it from the reserve when your customer pays.

The short answer is that factoring a $10,000 invoice costs $200 at a 2% fee. At an 85% advance you receive $8,500 up front, the reserve is $1,500, and $1,300 comes back after the fee, $9,800 in all. At 1% to 3% the fee runs $100 to $300.

The short answer is that you receive the advance up front and the reserve minus the fee later. A higher advance puts more cash in your hands on day one; the fee comes out of the reserve, so the total you receive equals face value minus the fee.

The short answer is that a flat rate charges one percentage however long the invoice takes to pay, and a tiered rate adds a charge for each period the invoice stays open. Your agreement with the lending partner states which applies.

Yes, you can expect non-recourse pricing toward the high end of the 1% to 3% range. Non-recourse covers nonpayment for a reason the agreement covers, such as your customer’s insolvency.

The short answer is yes: your customers pay the lending partner under a Notice of Assignment. Under UCC §9-406, once a customer has that notice, it settles the invoice only by paying as the notice directs.

Sources

General information about invoice factoring rates. Rates, advance amounts and approval come from IFXI’s lending partner after its review and can change.

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