Invoice Discounting & Factoring Calculator
How much immediate liquid cash can I unlock against unpaid customer invoices, and what is the exact finance cost?
Financial Inputs
Total invoice value raised against corporate buyers (including GST).
Percentage of invoice disbursed upfront by factoring partner or TReDS platform (typically 80–90%).
Number of days until the buyer settles the invoice.
Annualized discounting interest rate offered by the financier or TReDS auction.
One-time transaction or onboarding platform fee.
Immediate Upfront Cash Disbursed
On an invoice of ₹50 Lakh, you receive an immediate liquidity infusion of ₹40 Lakh (80% advance).
Balance Released on Buyer Settlement
₹9.12 L
Total Financing Cost
₹88,116
Effective Annualized Cost (APR)
13.40%
Key Financial Takeaways
- On an invoice of ₹50 Lakh, you receive an immediate liquidity infusion of ₹40 Lakh (80% advance).
- Over the 60-day credit cycle, total finance costs amount to approximately ₹88,116 (effective annualized cost: 13.4% APR).
- Upon buyer settlement, the remaining retained margin of ₹9.12 Lakh is credited directly to your current account.
Worked Case Study & Financial Impact
Worked Practical Example:
For a ₹50.00 Lakh invoice with an 80% advance rate and 60-day tenor at 11.50% p.a.: you receive ₹40.00 Lakh upfront. Discount charges are ₹75,616 and processing fee is ₹12,500 (Total cost: ₹88,116). Upon buyer payment, the remaining ₹9.12 Lakh is credited to you, releasing ₹49.12 Lakh net.
Strategic Credit Meaning:
Invoice discounting bridges working capital gaps without adding long-term debt to your balance sheet. It converts credit sales into immediate liquid operating cash within 24-48 hours.
Variables Influencing Your Credit Sanctions:
- Buyer Credit Profile: Factoring high-rated PSUs, MNCs, or AAA corporates commands lower discount spreads (8.5–10.5%).
- Tenor Duration: Shorter credit terms minimize cumulative interest charges.
- Recourse Structure: Non-recourse factoring protects your business against buyer payment default but carries slightly higher fee structures.
Frequently Asked Questions
Is invoice discounting considered on-balance-sheet debt?
Unlike term debt or CC limits, invoice discounting is a self-liquidating trade facility that is repaid directly when the debtor settles the invoice, leaving long-term leverage ratios unaffected.
What is the standard advance percentage on Indian TReDS platforms?
On RBI-licensed TReDS exchanges (M1xchange, RXIL, Invoicemart), advance rates typically range from 80% to 90%, depending on the buyer’s credit rating and acceptance.
Can MSMEs discount GST-inclusive invoices?
Yes, factoring and bill discounting facilities fund the total gross invoice value, including the applicable GST component.
Related Financial Calculators
View All Tools →Calculators on this platform provide indicative mathematical estimations based on industry-standard financial appraisal models (including Tandon Committee Method II, Nayak Turnover Method, and standard compound amortisation).
They do not constitute a formal facility sanction, credit commitment, or legal advisory from SME PAISA or any partner banking/NBFC institution. Final terms, interest margins, security stipulations, and credit sanctions remain strictly subject to formal credit appraisal, audited balance sheet verification, CMA Data assessment, and risk committee approval by institutional lenders.
Need structured debt financing beyond standard bank models?
Our ex-banker team structures facilities from ₹2 Cr to ₹100 Cr+ across 50+ banking & NBFC partners, ensuring optimized pricing and covenants.