Invoice finance cost of waiting calculator

UK SMEs wait an average of 45–60 days to be paid on B2B invoices. During that time, payroll, materials and tax still need funding. Many businesses bridge the gap with an overdraft — but overdraft rates and arrangement fees add up when the debtor book is large.

This invoice finance calculator UK businesses can use for planning compares two numbers: what a facility would cost per year, and what waiting costs you in overdraft or lost opportunity. If the facility is cheaper — or the released cash earns more elsewhere — it is worth exploring.

The model estimates your average debtor book as turnover on credit divided by 365, multiplied by average debtor days. Cash released is the advance rate applied to that balance. The service fee is charged on annual turnover; the discount charge applies to funds in use at your stated annual rate.

Figures are illustrative and assume a steady-state debtor book — constant turnover and payment terms through the year. Seasonal spikes, single large invoices or customer defaults are not modelled.

On £1.2m turnover on credit, 55 debtor days, 85% advance, 0.5% service fee and 8% discount charge, the debtor book averages about £181k and cash released roughly £154k. Annual facility cost is around £18k — compare that to the cost of waiting at a 10% overdraft rate on the full debtor book.

Adjust inputs to match your aged debtor report and a provider quote, then use Get my exact figure for a tailored facility from Tera's lender panel.