Invoice Factoring vs Asset-Based Lending (ABL) APR Calculator
Compare true effective Annual Percentage Rate (APR) and net financing costs between accounts receivable factoring discount fees and asset-based revolving credit lines.
Receivables & Payment Timeline
$
days
Average Days Sales Outstanding (DSO).
Invoice Factoring Terms
%
Immediate cash advance upon invoice upload.
%
Discount charge per 30-day aging tier.
$
15% ($15,000)
Asset-Based Lending (ABL) Terms
%
SOFR / Prime + margin on drawn balance.
%
Borrowing base borrowing limit on eligible AR.
%
Financing Cost Comparison
ABL IS 11.2% LOWER APR
Factoring True Effective APR
22.0%
$2,300 total fee per batch
ABL Line of Credit APR
10.8%
$1,060 financing cost per batch
Immediate Cash Advance (Factoring)
$82,700
Net cash after initial fee deduction
Immediate Cash Advance (ABL)
$80,000
Drawn against 80% borrowing base
Annualized Friction & Savings
Cost Savings with ABL per 45-day cycle:
$1,239.71
Annualized Dollar Savings (rolling AR):
$10,055.45 / yr
Factoring Reserve Returned upon Collection:
$15,000.00 (15%)
Factoring Fee % over 45 days:
2.25% (1.5 fee periods)
Financing Mechanism Comparison
Commercial Credit Standard
Invoice factoring quotes simple monthly fees (e.g. 1.5% per 30 days) that compound into high effective APRs because the fee is charged against the entire invoice face value while only a portion is advanced. Asset-based lines charge simple interest strictly on the capital drawn.