Result
Difference (loan minus factoring)
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Factoring cost = invoice amount × fee ÷ 100 — a fixed charge that doesn't explicitly depend on time. Loan cost over the same period = amount × rate ÷ 100 × days ÷ 365 — grows proportionally with the number of days. Difference = loan cost − factoring cost: a positive number means the loan costs more than factoring.
Since the factoring fee is usually fixed while loan cost grows linearly with time, a loan often ends up cheaper than factoring over short periods, and more expensive over long ones — factoring has a characteristic break-even period against a loan that depends on the ratio of the fee to the rate.
The comparison only accounts for direct money cost — factoring also takes the risk of buyer non-payment off the company's books (if it's non-recourse factoring) and doesn't add debt to the balance sheet, while a loan requires collateral and raises debt metrics. The calculation doesn't capture these qualitative differences.