Factoring Calculator | Mehmi Financial Group

Factoring Calculator

Calculate how much cash you can access by factoring your invoices and understand the true cost of invoice financing.

Single Invoice Factoring

Calculate how much cash you'll receive upfront when you factor a single invoice. See the advance amount, fees, and final payout when your customer pays.

Immediate Cash Advance
$0
received within 24-48 hours

Transaction Breakdown

Invoice Value$50,000
Advance (85%)$42,500
Factoring Fee$1,500
Reserve Held$7,500
Final Rebate (after payment)$6,000

Cost Analysis

$48.5K
Total Received
$1,500
Total Fees
36%
Annual Rate
$30
Cost per $1K

Step 1: You submit an invoice to the factor for verification.

Step 2: Factor advances 70-95% of the invoice value (typically within 24-48 hours).

Step 3: Your customer pays the factor directly when the invoice is due.

Step 4: Factor releases the reserve minus fees to you.

Day 0: Submit invoice for factoring

Day 1-2: Receive advance payment

Day 30 (or invoice due date): Customer pays factor

Day 31-32: Receive reserve rebate minus fees

Tip 1: Factor invoices from creditworthy customers for better rates.

Tip 2: Shorter payment terms mean lower total fees.

Tip 3: Compare recourse vs non-recourse factoring options.

*All amounts in Canadian dollars. Estimates only—this is not a financing offer or approval. Taxes (GST/PST/HST) NOT included.

Use this calculator to estimate how invoice factoring may impact your cash flow. Enter an invoice amount or monthly invoice volume, choose an advance rate and factoring fee, and see your expected advance, reserve, total fees, and an estimated effective annual rate.

What you can do on this page

  • Estimate immediate cash advance on a single invoice
  • Model monthly invoice volume to see ongoing cash flow and projected annual fees
  • Compare factoring cost versus a business line of credit cost for a short-term need
  • See an estimated effective annual rate based on days to customer payment

FAQs

Everything you need to know about how this calculator works, what the results mean, and what is included. If you need a quote or help reviewing your numbers, feel free to contact our credit analysts.
Get in touch
What is invoice factoring?
Invoice factoring is a way to convert unpaid invoices into cash by selling them to a factoring company for an advance, then receiving the remaining reserve minus fees after the customer pays.
How is the factoring advance calculated?
The advance is typically the invoice amount multiplied by the advance rate you select (for example, 85 percent).
What does the factoring fee mean?
The factoring fee is the cost charged by the factor for providing the advance and managing the transaction. Fees vary by customer credit, volume, industry, and payment terms.
What is “reserve” and when do I receive it?
Reserve is the portion of the invoice not advanced upfront. It is usually released after your customer pays, minus fees and any chargebacks.
Why does the effective annual rate look high?
Factoring fees are often quoted per invoice or per period, not as an annual percentage rate. When you annualize a short-term fee over 30 to 60 days, the equivalent annual rate can look much higher.
Is factoring a loan?
Factoring is generally structured as a sale of receivables rather than a traditional loan, but accounting and contract terms vary. Confirm details with your advisor and accountant.

Disclaimer:
This Truck & Heavy Equipment Financing Calculator is provided for informational purposes only. It offers estimates based on the information provided and current average rates, which may vary depending on individual creditworthiness, lender policies, market conditions, and other factors. This calculator does not constitute a loan offer, lease offer, or approval from Mehmi Financial Group or its affiliates. Please contact Mehmi Financial Group directly to confirm current rates, terms, and actual financing availability. Mehmi Financial Group accepts no liability for decisions made using this calculator.

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