Invoice Factoring Calculator
Invoice factoring: Can you afford it or can you afford not to use it?
Slow-pay customers can leave your cash flow tied up, forcing you to turn down new work, lay-off employees, miss payroll, or put you behind on tax payments and bills. To avoid letting these issues create a negative snowball effect on your business, factor your invoices and get the money you need within 1 business day.
How much does it cost to factor invoices with Crown?
Suppose you have an outstanding invoice of $250,000. Crown Financial advances 85% of the invoice to you, totaling $212,500. For every 2 weeks it takes your customer to pay the invoice, Crown deducts a factoring fee of 1.5%. If your customer takes 4 weeks to pay, the factoring fee would equal 3% or $7,500. Once the invoice is paid in full, Crown releases the reserve amount to you, minus the factoring fee.
So what will invoice factoring cost you? Try our invoice factoring calculator!
How the calculator works:
Invoice amount: The total amount of the invoice issued to the customer after the service or product has been rendered.
Percent advanced: Percentage of the invoice amount the factoring company will give you up front. (Typically between 80% and 90%).
Invoice due date: The number of weeks until the invoice amount is due to you. (up to 12, as little as 1)
Factoring fee: A fixed rate that Crown charges until the customer pays the invoice. Paying back quicker will result in a lower cost of financing; However, Crown will reserve more of the invoice amount. (1.5% every 2 weeks)
Advance amount: The amount of cash the seller can expect to receive after everything has been calculated and the cost of financing has been paid. This amount can be factored in 24 hours with a limit of 25 million.
Reserve amount: The remaining portion of the invoice the factoring company holds on to until it is paid in full by your customer. Once fully paid, the reserve amount after factoring fees are subtracted will be given to you.
Cost of financing: The total cost of invoice financing after factoring fees are applied.