Two fees, one number you can compare.
A discount rate quoted per thirty days and a service fee charged on face value are not comparable with anything until they are added together. This is the arithmetic that does it.
Last reviewed 8 September 2026
Indicative interest cost
Weekly
$337/week
Indicative only. Not a quote or offer of credit. Actual rates, fees, and repayments depend on the business profile and the lender's decision.
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What this tool calculates
The tool prices the discount fee. The service fee is added below.
The interactive calculator produces the interest cost of an average drawn balance, which is the discount fee and the largest single component of a receivables facility. The service fee is charged on the face value of invoices rather than on the advance, so it cannot be derived from the same three inputs, and the worked example below adds it along with the standing charges. A figure covering only the discount fee understates a facility by a fifth or more.
The components
Every fee, and what it is charged on.
A proposal that names only the first two is describing part of the cost. Not every facility carries all of these.
| Fee | Charged on | When |
|---|---|---|
| Discount fee | The amount advanced | Per day outstanding |
| Service fee | Invoice face value | Per invoice funded |
| Facility or line fee | The agreed limit | Monthly or annually |
| Minimum service fee | A volume floor | Monthly, even if volume is lower |
| Set-up fee | The facility | Once |
| Audit and review fee | Each review | Periodically |
| Termination fee | Ending early | On exit |
Indicative fee structures across the New Zealand market. Any particular facility is priced by its funder.
Worked example
A typical quote, added up.
A funder quotes 1.15% per 30 days on the advance, a 0.4% service fee on invoice value, a $250 monthly line fee, a $1,500 set-up fee and two audits a year at $900 each. The business puts $250,000 of invoices through each month, collects at 48 days, and is advanced 85%.
The average advance is roughly $340,000. The discount fee is about $56,400 a year, the service fee on $3m of invoice value is $12,000, the line fee is $3,000 and the audits are $1,800.
That is about $73,200 a year, or roughly 21.5% against the average advance, from a proposal whose headline number was 1.15%. Nothing was concealed and the arithmetic simply was not performed.
Illustrative annual cost
- Discount fee
- ~$56,400
- Service fee
- ~$12,000
- Line fee
- $3,000
- Audits
- $1,800
- All-in on average advance
- ~21.5%
Illustrative on stated assumptions and rounded. Not a quote or offer of credit.
Making quotes comparable
Two questions that do the whole job.
The first is what the facility will cost in dollars over twelve months at a stated invoice volume and a stated average collection period, with every fee included. Any funder can answer it, and the answers from two funders are directly comparable in a way headline rates never are.
The second is what happens if volume runs 30% below that. Minimum service fees and line fees appear in the answer, and they are where a lightly used facility becomes expensive relative to its rate.
Where a proposal cannot be reduced to those two figures, the useful response is to ask again rather than to compare the rates. A rate that cannot be turned into a total is not a price.
What the tool does
The arithmetic behind the figures, and what it leaves out.
In its scheduled mode the calculator applies the standard amortising formula, spreading an amount and its interest evenly across the term and converting the monthly result to a weekly one. In its revolving mode it does something simpler and more honest for a facility that never amortises, calculating the interest cost of an average drawn balance rather than a repayment that would not exist.
It excludes every fee. Establishment fees, documentation fees, monthly line fees, minimum service charges, audit fees and disbursements are all real and none of them is here, because they vary by funder in ways no formula can anticipate. On a receivables facility the service fee alone can be a sixth of the total cost, so the figure produced here is a floor rather than an estimate.
It also excludes GST treatment, any tax effect, and anything specific to a business. It is a way of seeing how amount, rate and term interact before a conversation with a funder, and it is not a quote, an application or an offer of credit. Nothing entered here is transmitted anywhere.
References
Sources
- Reserve Bank of New Zealand, interest rate statistics
Context for why indicative rate bands move over time rather than being fixed figures.
- Commerce Commission
The regulator whose guidance covers fee disclosure and representations about cost.
- External Reporting Board
The publisher of the standards governing how current assets and liabilities are classified.
- Inland Revenue, GST
The published source for GST as a current liability with fixed due dates.
- Financial Markets Authority, financial advice
Backs the distinction between general information of this kind and regulated financial advice.
FAQ
Invoice finance pricing, questions
What does this calculator include?
The discount fee, which is the interest cost of the average drawn balance and the largest single component. The service fee and the standing charges are added in the worked example above, because they are charged on different bases.
Why is a rate per 30 days misleading?
Because it measures a month rather than a year. Roughly twelve times the figure gives an annual equivalent before compounding, so a quote at 1.15% per 30 days is nothing like 1.15% a year.
Which fee is largest?
Ordinarily the discount fee, because it accrues on a large advance for the whole period an invoice is outstanding. The service fee is usually second and larger than it looks, because it is charged on face value rather than on the advance.
What is a minimum service fee?
A volume floor. Where actual invoicing falls below it the fee is charged as though the floor had been met, which makes a lightly used facility considerably more expensive than its rate suggests.
How do I compare two proposals?
By asking each funder for the total cost in dollars over twelve months on a stated volume and collection period with all fees included, and then asking what happens if volume runs thirty percent lower.
What reduces the cost most?
Collecting sooner, because the discount fee accrues per day outstanding. Ten days off the average collection period reduces the fee directly and reduces how much has to be drawn in the first place.
Is invoice finance expensive?
Per dollar it costs more than secured lending and less than most fast unsecured lending. The comparison that matters is against what the business could actually obtain rather than against a facility it cannot get.
Are the figures here quotes?
No. Everything on this page is indicative and illustrative, calculated on stated assumptions. Actual pricing comes from a funder after assessment, and nothing here is an offer of credit.
Related
Keep exploring
What invoice finance actually costs
The full guide behind this calculation.
Read onInvoice finance
The product these fees attach to.
Read onInvoice finance against factoring
Why the service fee differs so much between them.
Read onAbout the calculator
The formula behind the figures, and its limits.
Read on