Business Finance2026/27
Invoice Discounting Calculator
Calculate the cost and cash flow benefit of invoice discounting - a confidential way to release cash from unpaid invoices.
Invoice Details
Enter your invoice and facility terms
Typically 80-90% of invoice value
Interest charged on advanced funds
Administration fee on invoice value
Expected payment time from customer
Cash Flow Analysis
Immediate Cash Released
£42,171
After fees deducted
Total Cost
£328.60
Effective Rate
0.66%
Invoice Value£50,000
Advance (85%)£42,500
Less: Discount Fee-£78.60
Less: Service Fee-£250.00
Net Advance Received£42171.40
Balance on Payment£7,500
Total Received£49671.40
Annualised Cost: 5.3% APR equivalent
About Invoice Discounting
What is Invoice Discounting?
Invoice discounting is a form of short-term borrowing where you use unpaid invoices as collateral to obtain cash immediately. Unlike invoice factoring, you retain control of your sales ledger and credit control - your customers don't know you're using the facility.
Invoice Discounting vs Factoring
- Confidentiality: Discounting is confidential; factoring is disclosed
- Credit Control: You manage collections with discounting
- Cost: Discounting is usually cheaper but requires good credit control
- Eligibility: Discounting typically requires £500k+ annual turnover
Typical Terms (2026)
- Advance Rate: 80-90% of invoice value
- Discount Fee: 1-3% over base rate
- Service Fee: 0.2-0.5% of turnover
- Minimum Term: Usually 12 months