Invoice Factoring Calculator

When invoice factoring makes sense

Good fit when:

• Your DSO is 45+ days and you have growth-constrained capital — every dollar of AR is a dollar you can't spend on inventory, marketing, or payroll.
• You have a diverse customer base (10+ customers, no one over 30% of AR). Factors love diversification — concentration drives up rates.
• You're in B2B services, trucking, or government/healthcare — these are clean factoring profiles with well-developed funder relationships.
• The cost of factoring is lower than the cost of not taking new business. If turning down work because you can't fund inventory, factoring pays for itself in expanded revenue.

Skip / look elsewhere when:

• DSO is under 30 days. Factoring fees are calibrated for slower-pay cycles; a 20-day collection cycle doesn't generate enough time-value to justify the cost.
• You have 1-2 customers above 50% of AR. Most factors will decline the concentration, charge a steep premium, or only fund the diversified portion.
• Your margin is thin (under 20%). Factoring at 2-4% per invoice can eat 25%+ of gross profit. Cheaper alternatives (LOC, MCA) may be more efficient.
• You're worried about customer perception. The factor collects directly from your customers — most are used to this in B2B/trucking but some industries view factoring as a weakness signal.

One nuance: recourse vs non-recourse factoring. Recourse (cheaper) means you take back any uncollectible invoices. Non-recourse (more expensive) means the factor eats bad debt. For very diverse, very creditworthy customers, recourse is fine — you'd rarely lose. For concentration or shaky customers, non-recourse buys real insurance.

Which path fits you?

This tool helps three audiences. Pick the one that's you.

Related tools