How much does invoice factoring cost?
Invoice factoring fees vary from company to company, so check with your invoice factoring service before getting started.
Application/Due Diligence Fee
Some factors charge application and due diligence fees and some do not. Those that do not may recover this upfront expense by increasing the initial invoice factoring fees. This fee varies highly from companies to companies and can cost anywhere from zero to thousands of dollars.
Some factoring companies retain a small percentage of each invoice. Triumph Business Capital, however, does not charge a closing fee.
Monthly and Termination Fees
Some companies may require you to sell a certain amount of your invoice each month and sign a long-term contract. If the monthly target isn’t met, a minimum monthly invoice fee will be charged. Terminating the contract early can trigger a cancellation fee—typically a percentage of your line of credit.
The cost of paying for your invoices in advance can vary anywhere from 1.5–5% of the invoice value each month. This wide disparity is yet another reason to check with your factor before jumping into a relationship.
Invoice Factoring Fee
If your invoices go beyond the 30–45 days covered by the advance discount fee, you can expect an additional charge of 2–3% or more for every 30 days that the receivable is outstanding beyond the original 30 days. Some factors may prorate the fee daily, while others may charge on a 10-day basis.
Triumph’s factoring fee depends on your unique factoring business agreement. Our invoice factoring specialists considered whether you’ve chosen recourse or non-recourse factoring, the credit quality of your customers, and more.
Regardless of your agreement or if you’re on a non-recourse or recourse program, our fee structure and schedule is transparent