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What does factoring cost?

Answered By Editor


The cost of factoring is negotiated between the buyer and seller. The amount is usually a percent of the total account balances. The fee will be based on the risk the buyer is taking, such as the expectation of uncollectable balances. It will also take into account the expected time it will take to collect the balances. For good accounts with a 30-45 day due balance, a 10% fee is typical. For others, 20% to 25% is typical.

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