Invoice Finance Calculator
Calculate the cost of debtor finance, invoice discounting or factoring. Unlock working capital tied up in your outstanding invoices.
Invoice Finance Details
The percentage of the invoice advanced immediately. Typically 70–90%.
Annual interest charged on the advance. Typical SA range: 2–5% p.a.
Expected days until your customer pays. E.g. 30, 45, 60, 90 days.
For full factoring where the provider manages collections
Results update automatically as you type
Invoice Finance Results
Advance Received Now
R 800 000,00
of R 1 000 000,00 invoice (80% advance rate)
Finance Cost
R 3 452,05
for 45 days
Annualised Cost
3.50%
effective APR
Cost Breakdown
- Invoice valueR 1 000 000,00
- Advance (80%)+R 800 000,00
- Finance cost (45 days @ 3.5% p.a.)-R 3 452,05
- Balance on collectionR 196 547,95
- Net received (total)R 996 547,95
💡 Finance cost is time-sensitive
At current settings, finance costs you approximately R 76,71/day. If your customer paid 15 days sooner, you'd save R 1 150,68 in finance charges on this invoice alone.
* Consider adding early payment incentives (e.g. 1% discount for payment within 14 days) — the cost to you may be less than the finance charge you save. On high-volume invoice books, reducing average debtor days from 60 to 45 can save tens of thousands per year.
Compare invoice finance providers
Invoice finance in South Africa — how does it work?
Invoice discounting allows you to borrow against unpaid invoices while retaining control of collections. Your customers typically don't know you're using the facility. You receive an advance (usually 70–90% of the invoice value) and repay once your customer pays, minus the lender's discount fee.
Invoice factoring involves selling your invoices to a factoring company (factor) who takes over the collection process. You receive the advance upfront, and the factor manages chasing payment. This is useful if you want to outsource debtor management, but your customers will know about the arrangement.
In South Africa, invoice finance is a popular working capital solution for SMEs in sectors like construction, staffing, transport, and manufacturing. Typical advance rates are 75–90% with discount rates of 2–5% per annum on the advance.
How to Reduce Your Invoice Finance Costs
Invoice finance cost is driven by advance size, discount rate, and debtor days. Here's how to minimise what you pay.
Reduce Your Debtor Days
Finance cost is charged daily on the advance. Every day you reduce your average debtor payment time is a day you're not paying interest. Tighten your credit terms (30 days net instead of 60), send invoices immediately on delivery, and follow up overdue accounts proactively. At 3.5% p.a. on R80,000, each saved day is worth ~R7.67.
Offer Early Payment Discounts
Offer customers a 1–2% early payment discount for settling within 14 days. The cost to you (1–2% of the invoice) is often less than the finance charge you save. On a R100,000 invoice at 3.5% over 45 days, the finance cost is ~R430. A 1% early settlement discount costs only R1,000 — but eliminates the facility drawdown entirely.
Only Finance Your Largest Invoices
Fixed administration fees can make small invoice financing expensive on a percentage basis. Focus your invoice finance facility on large, high-value invoices where the working capital benefit outweighs the annualised cost. Bundle smaller invoices where possible before drawing down.
Choose Discounting Over Factoring
If your team can manage collections, invoice discounting (no factoring fee) is typically cheaper than full factoring. Factoring fees of 1–3% of invoice value add significantly to your annualised cost. Reserve factoring for customers with poor payment history where outsourced collection is genuinely worth the premium.
Negotiate a Lower Discount Rate
Discount rates are negotiable, especially once you have a track record with your provider. Showing consistent repayment, low bad debt, and growing invoice volumes gives you leverage to push for prime-linked rates (currently 11.25% prime in SA) rather than flat percentage quotes. Even 0.5% less p.a. saves thousands annually on a R1m+ debtor book.
Draw Down Only What You Need
Most invoice finance facilities allow selective drawdown — you don't have to advance against every invoice. If your cash flow is sufficient for smaller invoices, only draw against the large ones where you actually need the working capital. Finance charges only apply to amounts drawn, so unused invoice limits cost nothing.
Invoice Finance Cost Reference Table
Indicative finance costs at 80% advance rate, 3.5% p.a. discount rate. Excludes factoring fees. Annualised cost (APR) stays constant across amounts at the same days-to-payment.
| Invoice Amount | Advance (80%) | 30 days | 45 days | 60 days | 90 days | ||||
|---|---|---|---|---|---|---|---|---|---|
| Cost | Net | Cost | Net | Cost | Net | Cost | Net | ||
| R 50 000,00 | R 40 000,00 | R 115,07 | R 49 884,93 | R 172,60 | R 49 827,40 | R 230,14 | R 49 769,86 | R 345,21 | R 49 654,79 |
| R 100 000,00 | R 80 000,00 | R 230,14 | R 99 769,86 | R 345,21 | R 99 654,79 | R 460,27 | R 99 539,73 | R 690,41 | R 99 309,59 |
| R 200 000,00 | R 160 000,00 | R 460,27 | R 199 539,73 | R 690,41 | R 199 309,59 | R 920,55 | R 199 079,45 | R 1 380,82 | R 198 619,18 |
| R 500 000,00 | R 400 000,00 | R 1 150,68 | R 498 849,32 | R 1 726,03 | R 498 273,97 | R 2 301,37 | R 497 698,63 | R 3 452,05 | R 496 547,95 |
| R 1 000 000,00 | R 800 000,00 | R 2 301,37 | R 997 698,63 | R 3 452,05 | R 996 547,95 | R 4 602,74 | R 995 397,26 | R 6 904,11 | R 993 095,89 |
* 80% advance rate, 3.5% p.a. discount rate, no factoring fee. Annualised cost (APR) = 3.5% across all amounts and terms at constant rate. Actual rates depend on your lender, debtor quality, and facility terms.
Ready to unlock cash from your invoices?
Get matched with SA invoice finance providers — free quotes, quick decisions.
Rates are indicative and subject to change without notice. Finance EzyFind is a free comparison and matching service — not a lender or credit provider. All lending is subject to the National Credit Act (NCA). Please borrow responsibly.
Related Business Finance
Download the Finance EzyFind App
