Funding Compare

What does each way of borrowing against A/R really cost?

Set the receivables you could pledge and how long they take to pay, then compare the effective annual cost of three common structures.

Three parallel bars of different lengths with gold dividers and round end nodes

Every figure on this page is illustrative and is not an offer, quote or recommendation. Real terms depend on the lender and your documents.

Receivables

Eligible receivables ($K):

Average days to cash:

Receivables line of credit

Advance rate (%)

Interest rate (% a year)

Upfront fee (% of draw)

Term (months)

Invoice factoring

Advance rate (%)

Fee (% of invoice per 30 days)

Outstanding period follows the days-to-cash slider above.

Term loan

Loan size (% of receivables)

Interest rate (% a year)

Origination fee (%)

Term (months, amortizing)

Effective annual cost

Effective cost is the annualized rate that equates cash received now with all payments, including fees. Factoring is treated as one advance repaid with the fee after the outstanding period. Other terms such as covenants, reserves and unused-line fees are not modeled.