Reverse Factoring Calculator

Reverse factoring, also called supply chain finance, is an arrangement where a financial institution pays a supplier's invoices early at a discount, on behalf of the buyer, while the buyer repays the financier on the original or extended due date.

The discount cost is calculated as the Total Invoice Value multiplied by the Discount Rate (as a percentage). This is the fee the financier retains for paying the supplier early.

It compares the cost of reverse factoring (the discount cost) against the estimated cost of alternative financing over the same extended payment period. A positive net benefit means reverse factoring is cheaper than alternative financing for that period.

The annual interest rate represents the cost of an alternative financing option, such as a business line of credit or short-term loan. It lets you benchmark reverse factoring against what you would otherwise pay to borrow the same funds.

Yes. The calculator works with any invoice value you enter and the results are shown in the same currency unit as your input. It is designed to work at any scale, from small invoices to large enterprise transactions.

Reverse factoring can strengthen supplier relationships because suppliers get paid early and reliably, while buyers benefit from extended payment terms. Both sides typically gain improved cash flow predictability.