Factoring Fee Calculator

How this calculator works

The calculator applies your factoring fee percentage to the full invoice amount, then splits the invoice into an immediate advance (based on your advance rate) and a reserve held back for later release. The fee is deducted from the immediate advance, giving you cash received now, while total net cash reflects the full invoice minus the fee once the reserve is released.

Worked example

A $2,000 invoice factored at a 3% fee with a 100% advance rate: the fee is $60, so cash received now is $1,940. With a 97% advance rate instead, the immediate advance is $1,940 and $60 is held in reserve; after the $60 fee is deducted from the advance, cash received now is $1,880, with the $60 reserve released later — the same $1,940 total net cash either way.

How advance rate changes cash timing, not total cash

Same $2,000 invoice at a 3% fee as the worked example above — only the advance rate changes:

Total net cash stays $1,940 in every row — the fee is 3% of the invoice regardless of advance rate. What changes is how much arrives immediately versus how much waits in reserve.

Understanding the inputs and outputs

• Immediate advance is what you're paid right away, before the fee is deducted.
• Reserve held is the portion (if any) held back until the invoice is actually paid by the broker or shipper.
• Total net cash is the bottom line — everything you'll ultimately receive from this invoice after the fee.

Common mistakes

• Comparing factoring fee percentages without checking each company's advance rate.
• Forgetting that a reserve, if any, is often released later rather than lost.
• Not accounting for the factoring fee when calculating a load's real profit — see the Load Profit Calculator.

Limitations

This calculator assumes the fee is deducted from the advance and the reserve (if any) is released in full later — some factoring companies structure this differently, so confirm against your actual agreement.