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Freight Factoring Cost Calculator — Invoice Factoring Fees

Calculate the true cost of freight invoice factoring. Compare factoring fees vs waiting for direct payment, and find the breakeven where factoring makes financial sense.

Quick answer: Factoring fees: 2–5% of invoice value. On a $2,000 load, that's $40–$100 per invoice. But if factoring allows you to take more loads by having immediate cash, the net impact can be positive.

💵 Freight Factoring Cost Calculator

Typical: 2–5%. Flat fee or per-day.
If not factoring — broker/shipper payment terms
Factoring Fee Per Invoice
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Net Revenue Per Invoice
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Annual Factoring Cost
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How to Use This Calculator

  1. Enter invoice value — the load/freight invoice amount to be factored.
  2. Enter factoring rate — your factor's rate — typically 2–5% flat, or a per-day rate (0.06–0.10%/day).
  3. Enter direct payment days — how long until the broker/shipper would pay without factoring — usually 30–45 days.
  4. Review annual cost — compare to the value of immediate cash flow for your operation.

Worked Example

$2,000 invoice, 3.5% factoring rate, 30-day direct terms, 20 invoices/month.

  1. Fee per invoice: $2,000 × 3.5% = $70
  2. Net revenue: $1,930
  3. Monthly cost: $70 × 20 = $1,400
  4. Annual cost: $16,800
  5. Effective APR: 3.5% ÷ 30 days × 365 = 42.6%

Factoring costs the equivalent of 42.6% APR when compared to waiting 30 days. For a well-capitalised owner-operator with reliable 30-day payers, factoring is expensive. For a new carrier needing cash to buy fuel for the next load, it's often essential.

Frequently Asked Questions

Factoring makes sense when: you're cash flow constrained, brokers/shippers pay in 30–60 days, and you can use the immediate cash to take more loads. It's less valuable if you have a credit line, your customers pay quickly (under 15 days), or your margins are thin enough that 3–5% meaningfully impacts profitability.

Recourse factoring: if the shipper/broker doesn't pay, you must buy back the invoice. Non-recourse: the factor absorbs the bad debt risk. Non-recourse costs 0.5–1% more. For factoring with established brokers (Echo, C.H. Robinson, Coyote) who rarely default, recourse factoring at a lower rate is usually the better value.