Advance rate

How much of an invoice a factor pays upfront before the customer has paid.

Why it matters

A higher advance rate means more upfront cash, but the spread between advance and reserve still includes fees. Verify how the rate changes across debtors or after credit review.

Related terms

Related article: What is invoice factoring?

Related reading

Sources

  • International Factoring Association - International Factoring Association. Accessed 2026-05-19. Industry association source for factoring terminology and industry context.
  • Secured Finance Network - Secured Finance Network. Accessed 2026-05-19. Industry education source for secured finance and asset-based lending context.
Financial disclaimer. This page is educational only and is not financial, legal, tax, accounting, or credit advice. Factoring terms vary by provider and contract. Read the full disclaimer.