Work out the cost of factoring or discounting a UK invoice — the advance you receive upfront, the service fee, the discount charge, and the effective annual cost rate.
Données vérifiées · July 2026
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Invoice factoring advances a percentage of an invoice's value upfront, then charges a service fee on the invoice value plus a discount (interest-like) charge on the advanced amount for the days it remains outstanding until the customer pays. This calculator totals both charges and annualises the combined cost so you can compare factoring against other short-term finance options on a like-for-like basis.
£10,000 invoice, 85% advance rate, 1.5% service fee, 8% discount rate, 45 days to payment: total cost of roughly £248, an effective annual cost rate around 2.5%.
Enter the invoice value and the advance rate the factor offers.
Enter the service fee percentage charged on the invoice value.
Enter the discount rate percentage charged on the advanced amount.
Enter the expected number of days until the customer pays.
Last data update
July 7, 2026
Sources and references
UK Finance — Invoice Finance & Asset Based Lending market data; British Business Bank — Invoice finance guide.
The data in this calculator is updated regularly to reflect the latest official rates. When in doubt, consult the official sources listed above.
It approximates one by annualising the combined service fee and discount charge over the invoice value and payment period, but it is not a regulated APR calculation — use it for comparison between financing options, not as a contractual disclosure.
Factoring typically includes the factor managing collections from your customer, while invoice discounting keeps collections in-house and confidential — the cost structure modelled here (advance, service fee, discount charge) applies to both, though rates and fees vary by arrangement.