Updated 2026-05-19

Flat fee

A fixed fee charge that does not grow day by day.

Why it matters

A flat fee makes cost predictable for short payment cycles. If a business has customers who consistently pay within 30 to 45 days, a flat fee priced at that cycle may be more economical than a daily rate on the same invoices. Flat fees work against the seller when customers pay slowly, since the fee is the same whether the invoice pays in 15 days or 90 days. Programs with flat fees typically define what happens when an invoice remains unpaid past the stated term: either an additional tier applies, the fee resets, or the invoice enters the chargeback process.

How it appears in contracts

Flat fee structures appear in the Fee Schedule section of the factoring agreement. The agreement should define the period covered by the flat fee: whether it applies to each defined number of days or for the life of the invoice. When an invoice exceeds the flat fee period, the agreement should specify whether the fee increases by an additional flat amount per period, converts to a daily rate, or triggers a chargeback. Sellers should model their actual customer payment history against the flat fee structure to determine whether the pricing is more favorable than a comparable daily rate program.

Related terms

• Advance rate
• Reserve
• Recourse
• Chargeback