Invoice factoring: how it is actually priced

You are selling an invoice, not borrowing against it.

Factoring is a true sale of a receivable, governed by the Uniform Commercial Code, not a loan you pay back. That is why it is quoted on its own terms. The factor buys your unpaid invoice and advances you a percentage of the face value once the invoice is verified. It holds the rest as a reserve, and when your customer pays the invoice, it releases that reserve to you minus the factoring fee. Nothing here is an annualized cost by nature. One caution: a factoring fee is not an MCA factor and not a lease money factor. A factoring fee is a small percentage of the invoice, roughly 1 to 5 percent per 30 days; an MCA factor of 1.10 to 1.50 is a total-payback multiplier, and a lease money factor near 0.02 to 0.035 is a monthly payment multiplier. They are three different measures that happen to share the word factor.

How much you get up front, by industry.

The advance percentage is set as a proxy for one thing: how creditworthy and fast-paying your customers are, and how clean the invoice is. Creditworthy customers who pay quickly on clean, undisputed invoices earn a higher advance; slow or contested billing earns a lower one. Industry is the visible stand-in for that, so the advance sorts by industry in a stable order.

An industry-association survey puts the blended, all-industry advance at 84.3 percent, which is a useful anchor but not any one industry’s center, since its base skews heavily toward apparel and textiles. The other side of the advance is the reserve: it is simply 100 percent minus the advance. A 90 percent advance leaves a 10 percent reserve; a 75 percent construction advance leaves 25 percent. That reserve comes back to you, net of the fee, once your customer pays.

What the factor keeps, per 30 days.

The factoring fee is a percentage of the invoice face charged per 30-day period. The core band runs about 1 to 3 percent for freight, staffing, general B2B, and strong customers, and it steps up to about 3 to 5 percent for construction, medical, and single-invoice or spot deals, where the collection risk is higher. A sub-1.5 percent floor exists for government, Fortune 500, and whole-ledger clients, advertised as low as 0.69 to 1.59 percent for the strongest files, but read that as a best-case advertised figure, not the going cost. Because the fee is charged per 30 days and the average invoice takes about 46 days to pay, the realized cost on a single invoice usually runs a little above the headline first-30 fee.

Who eats a customer who never pays.

Every factoring deal is either recourse or non-recourse, and it changes the cost. Recourse, the default and the cheaper of the two, means you buy back an invoice your customer never pays; it is how most client relationships are written, about 78 percent by client count. Non-recourse means the factor absorbs that loss, but only for your customer’s insolvency during a defined window, not for disputes, short-pays, or simple slow-pays. That protection carries a surcharge on the fee, about half a point to a point for freight and about half a point to two points for general B2B, where a recourse fee near 1.5 percent can nearly double to about 3 percent non-recourse. Non-recourse is the majority of factored volume even though recourse dominates by client count.

Where these figures come from, honestly.

Not all of these numbers rest on the same footing, and it is worth saying so. The freight fee is the one hard-anchored figure: it is tied to a public factoring company’s SEC filings, where the disclosed portfolio fee runs about 1.3 percent on a large-fleet book, with small owner-operators paying more, closer to 2.5 to 3.5 percent. The blended advance of 84.3 percent comes from an industry-association survey. Everything else, the by-industry advance centers and the non-freight fee bands, comes from factor and aggregator pricing pages that lean toward their advertised floors. So read the ranking as solid, freight highest, then staffing, general B2B, medical, and construction lowest, and read the exact center values as directional rather than measured.

A comparison overlay, not a quote.

Factoring is not quoted as an APR, but two states now require factors to disclose an estimated one, and it is a fair way to line factoring up against a loan. The math is simple: the factoring fee times 365, divided by the days your customer takes to pay. A 2 percent fee collected in about 46 days annualizes to roughly the mid-teens percent, about 16 percent; the same 2 percent fee on a fast 15-day freight invoice annualizes to above 48 percent. Use the APR-equivalent only to compare factoring against an annualized product like a term loan or a line of credit. It is never how factoring is quoted, and it swings entirely on when your customer pays, the one variable you do not control.

Every figure on this page is general US market data as of Jul 2026, not Trident pricing and not an offer. The freight fee is anchored to a public factor’s SEC filings and the blended advance to an industry survey; the by-industry centers and the non-freight fee bands are directional figures drawn from factor and aggregator pages. It is here so you can sanity-check a quote against typical ranges. Any real offer, and the partner paperwork behind it, governs. This page is education, not legal or financial advice.