How Much Does It Cost to Factor an Invoice?

Invoice factoring gives businesses instant access to working capital by converting unpaid invoices into upfront cash. But what does it really cost to factor an invoice? This guide delivers clear pricing, real-world case studies across industries, and explains why Factor & Fund is the most transparent, flexible solution in 2025 with no hidden fees and fast, reliable funding.

What Is Invoice Factoring?

Invoice factoring is a form of business financing where a company sells its outstanding invoices to a factoring company. In exchange, the business receives up to 95% of the invoice value as an advance, typically within the same day, while the factoring company collects payment directly from the customer. Once the customer pays, you receive the balance, minus the previously agreed factoring fee. This is not a loan: there’s no new debt, loss of equity, or long approval wait.

How Much Does Invoice Factoring Cost?

The Factor & Fund Advantage

Simple Rates: 2.75%–7% per invoice (higher only in rare cases).
Funding: Up to 95% advance on your invoice value.
Speed: Same-day or next-day funding, every time.
No Extra Fees: Transparent pricing, no hidden costs or surprises.

Typical industry factoring rates range between 3%–7%, but additional fee, such as application, origination, or service fees, are common elsewhere. At Factor & Fund, there are no monthly minimums, no monthly maintenance fees, and no penalties for early repayment.

Understanding the Math

You submit: $20,000 invoice
Advance (95%): $19,000 funded the same day
Fee (3.5%): $700 (on $20,000)
When customer pays: You receive $300 final payout ($1,000 minus $700 fee)

Total received: $19,300 (96.5% of invoice value, minus the fee)

Many competitors may advertise a lower headline rate but add hidden charges, monthly minimums, or require you to factor all your invoices. At Factor & Fund, costs are fully disclosed from the outset.

Industry Case Studies: Real-World Cost and Value

Trucking & Transportation: Covering Fuel and Growth

Case Study: Trucking Co.

This Trucking Co., a startup just 45 days old, needed upfront cash to secure a large client hauling contract. They submitted $50,000 in receivables. Factor & Fund funded 95% ($47,500) the same day, with a 3% rate. As soon as the broker paid the invoice, they received the final $1,000 payment minus the $1,500 fee. Result: they scaled their fleet, paid drivers, and accepted bigger loads, turning one contract into three repeat clients.

Staffing & Healthcare: Meeting Payroll During Growth

Case Study: Nurse Staffing Co.

Nurse Staffing placed skilled nurses at multiple clinics but had trouble making payroll due to insurance and hospital payment delays. By factoring $120,000/month in invoices with Factor & Fund, they received $114,000 per month up front at a 5% flat fee. When clients paid, they received the $6,000 remainder. This let them meet payroll on time, cover taxes, and accept large new contracts knowing their funding was always there, no matter the payer’s schedule.

Manufacturing: Keeping Production Rolling

Case Study: Manufacturing Co.

Company supplied custom parts to national distributors, but many buyers had 60-day net terms. Constant cash flow gaps made it tough to buy materials and keep shifts humming. Using invoice factoring, Company submitted $200,000 of receivables monthly. Factor & Fund funded $190,000 (95% advance) at a 2.75% monthly rate. The cost was $5,500 for fast, debt-free capital that let them ramp up output, take on rush orders, and smooth supply chain cycles. No loan applications or equity loss, just faster growth.

Professional Services: Bridging Client Payment Gaps

Case Study: Digital Marketing Co.

The Company was handling a burst of campaign work for major retail brands. Marketing budgets were approved, but payments came 45–90 days after project delivery. To avoid taking out a loan, Company factored $40,000 in invoices monthly with a 4% fee at Factor & Fund. They received $38,000 up front, paid designers and ad platforms, and maintained momentum during the agency’s busiest quarter, all while staying debt-free.

Wholesale & Distribution: Inventory and Expansion

Case Study: Distribution Co.

Company bought bulk from manufacturers and distributed to retailers across three states. Inventory moved fast, and so did opportunities to buy in larger quantities at discounts. When they factored $80,000 in monthly invoices (3.5% fee), they received $76,000 right away and had the working capital to move quickly on hot buys, securing better pricing and passing savings to customers.

Full Fee Transparency: What You Won’t Pay at Factor & Fund

No application fees
No origination fees
No monthly minimums or maintenance
No early repayment penalties
No hidden fees, period

Your only cost: the clearly disclosed, competitive factoring fee (2.75%–7%, rare exceptions for special cases). Everything else goes directly into your business.

Why Different Industries Choose Invoice Factoring

Trucking & Logistics

Fast funding covers fuel, insurance, and repairs, keeping trucks rolling even when brokers delay payments.

Staffing

Funds payroll weekly without relying on slow client or insurance payments.

Manufacturing

Smooths out uneven demand, covers supply chain and payroll, and enables bulk raw material buys.

Professional/IT Services

Bridges project payment lags so teams can keep moving on new accounts and campaigns.

Wholesale/Distribution

Enables fast, large inventory purchases and discounts, crucial in competitive supply chains.

How Our Invoice Factoring Process Works

Submit Invoice: Quick digital upload, no paperwork pain
Approval: Same-day review and eligibility check (based on client, not just your credit)
Funding: Up to 95% of invoice value wired to your account, often within hours
Collection: Factor & Fund collects from your customer
Final Payment: Remaining balance, minus the single fee, sent to you after payment

Simple, fast, transparent at every step.

Frequently Asked Questions

Q: Are there any extra fees or surprises?
A: No. Only a single, transparent fee (2.75%–7%), and in most cases, that’s all you pay.

Q: How much can I get advanced?
A: Up to 95% of your invoice value, probably the highest in the industry.

Q: How quickly does funding happen?
A: Same-day or next-day in all but the rarest cases.

Q: Are there contracts or monthly minimums?
A: No. Factor invoices as needed, no mandatory lock-ins.

Q: What if a client pays late or defaults?
A: Most clients select standard “recourse” contracts (you cover truly uncollectible debt), but advanced options are available and you’re always fully informed at onboarding.

Ready to Factor an Invoice?

Apply online in just minutes, with fast approval and funding. Questions? See our financial options or browse fees for industry-specific results.