What is advance rate?
Advance Rate: The percentage of an invoice's face value the factor sends you upfront.
How it works
If your advance rate is 90% and you factor a $50,000 invoice, you receive $45,000 within 24 hours of verification. The remaining $5,000 is held in reserve until your customer pays. Advance rates for manufacturers typically range 80–95%, with higher rates for strong commercial or government receivables.
Where you will run into it
Advance Rate comes up most often in invoice factoring conversations. See how invoice factoring works, including real cost ranges and timelines.
Related terms
Advance Rate questions
The percentage of an invoice's face value the factor sends you upfront.
If your advance rate is 90% and you factor a $50,000 invoice, you receive $45,000 within 24 hours of verification. The remaining $5,000 is held in reserve until your customer pays. Advance rates for manufacturers typically range 80–95%, with higher rates for strong commercial or government receivables.
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