The factoring advance rate is the percentage that the face value of the invoice is multiplied by to determine how much money a factoring client initially receives. This percentage is usually found in the factoring agreement between a factoring client and the factoring company. This is part of the pricing of a factoring deal and varies according to several facts of each specific deal. Typically advance rates start at a 75% advance and adjust upwards or downwards based on the factoring company’s determination of risk. In general the less perceived risk the higher the advance rate.
