- Free Invoice Factoring Cost Calculator tool - get instant estimates based on your specific inputs
- UK-specific data - all costs and benchmarks based on current 0.5-3.5% market rates
- No signup required - use the calculator instantly and compare scenarios
- Updated for 2026 - reflects the latest pricing, tax rates, and industry benchmarks
Invoice factoring costs UK businesses between 1% and 5% of the total invoice value, comprising a service fee of 0.5% to 3.5% for administration and credit management, plus a discount charge of 1.5% to 4.5% annualised on the advance amount for the period until your customer pays. A business factoring £100,000 per month in invoices with 45-day payment terms would typically pay £1,000 to £3,000 per month in combined fees, receiving approximately 85% of the invoice value within 24 hours and the remaining 15% (less fees) when the customer settles. Recourse factoring is the cheapest option because the business retains bad debt risk, while non-recourse factoring costs 50% to 75% more but protects against customer insolvency. Selective or spot factoring lets you choose individual invoices rather than committing your entire ledger, offering flexibility at a slightly higher per-invoice rate. This calculator estimates your monthly factoring costs based on invoice volume, average value, and factoring type.
How to Use This Calculator
Enter your monthly invoice count and average value to set the total factoring volume.
Select the factoring type — recourse (cheapest), non-recourse (safest), or selective (most flexible).
Set your average payment days — longer payment terms increase the discount charge.
Review your monthly cost broken down into service fee and discount charge, plus the effective annual rate.
