Invoice Financing

Advances cash against outstanding invoices (factoring or discounting). Costs depend on advance rate, fees, and days outstanding.

Key Inputs

• Invoice amount and advance rate
• Discount rate or fee
• Days to collection

Example

$50,000 invoice, 85% advance → $42,500. 3% fee for 30 days → cost $1,275; effective APR depends on turnover.

FAQs

Recourse?
Recourse factoring requires repurchase on nonpayment; nonrecourse shifts credit risk.

Cash flow?
Improves liquidity while awaiting payment.