Invoice Factoring Calculator UK
Calculate the cost of selling invoices for immediate cash. Factoring typically costs 1.5-3.5% per month. Know if it's worth it.
Invoice Details
Total invoice amount owed by customer
Factoring company's fee (typically 1.5-3.5% per month)
Invoice payment terms (e.g., "Net 30")
How long this customer typically takes to pay
Common Scenarios:
UK Factoring Rates 2025
Factoring Cost
Cash You Receive
£9750
£10000 invoice - £250 fee
Fair Factoring Rate
15.2% APR
Industry average
Verdict
⚠️ ACCEPTABLE IF DESPERATE FOR CASH
15.2% APR = £250 fee to get cash 60 days early. Cheaper than most factoring but still expensive.
Only use if you have immediate cash need (payroll, urgent supplier payment). Long-term: fix payment terms or build cash buffer.
What You're Paying For
2.5% fee × 12 months = 15.2% APR
💡 Better Alternatives
📅 Prevent Late Payment
Best solution: tighter payment terms (14 days), deposits on large jobs (50%), and aggressive chasing at 7 days overdue.
💰 Build Cash Buffer
Keep 3 months expenses in cash. If you need factoring regularly, you're undercapitalized. Retain more profit or get term loan.
⚖️ Legal Rights
UK Late Payment Act: charge 8% + base rate on B2B invoices after payment terms. Plus £40-£100 debt recovery fee.
💳 Better Than Factoring: Payment Reminders in Toolfy
Invoice factoring costs 18-42% APR. Toolfy helps you get paid faster without selling invoices:
Automated payment reminders
Send reminders 7 days before due, on due date, 7 days overdue
Stripe checkout links
Customers pay with card - money in bank account 2 days later
Track payment aging
See which invoices are overdue and chase proactively