Invoice Finance costs vary from business to business but are broadly split into the following categories:
Arrangement Fee / Survey Cost
Some lenders will charge a fee to carry out due diligence, known as a survey and there may also be an arrangement fee, which is the cost of setting up the facility. Some will also charge a small annual renewal fee thereafter.
Service Fee
The Invoice Discounting Costs include a service fee for the day to day administration of the facility, usually charged as a percentage of the gross invoice value but sometimes this can be a pre-agreed fixed monthly amount. When this is charged as a percentage, there is often a minimum monthly charge agreed at the outset.
Discount Fee
This is calculated as a percentage of the total funds you borrow.
Ancillary costs
Some invoice finance companies will charge additional ancillary fees, which can include CHAPS payment charges for when you need to draw down funds on the same day.
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