To keep things simple, we’re going to lay out a scenario and show you what you might pay under those circumstances.

ABC Staffing is facing difficulties when it comes to making payroll each week. Instead of waiting 30 days for their client, TGIF, to pay their $10,000 invoice, they reach out to Factoring Co for a quote. Factoring Co offers ABC Staffing a 90% advance rate, a 1% admin fee, and a .02% daily rate.

Let’s break down the math.

• A 90% advance rate ($10,000 x 90%) = a $9,000 ACH wire transfer to ABC Staffing, with $1,000 held in reserve by Factoring Co.
• A 1% admin fee on that invoice ($10,000 x 1%) = $100 admin fee
• A .02% daily fee on the invoice if your client TGIF pays in 30 days (30 x .02% x 10,000) = $60 daily fee
• Your reserve you get back after the 30 days is $1000 - $60 daily fee - $100 admin fee = $840 back
• In total, it will cost you $160 to fund a $10,000 invoice. You would receive $9,840.

Remember that funding tends to be based on payroll needs, and you choose the frequency. Some people fund every week, some people fund bi-weekly and others monthly. It can be variable to meet your needs.