Minimum Fee Shortfall Calculator
Most invoice finance facilities charge a service fee as a percentage of what you invoice each month, with a contracted minimum monthly fee underneath it. On the default example, a facility with a £750 minimum and a 1% service charge on £50,000 of invoicing that month (£500) has a shortfall of £250, the gap between what the percentage would have charged and the floor you actually pay. Enter your own figures below.
A minimum-fee shortfall on an invoice finance facility is the gap between what a percentage-based service charge would have cost on a given month's actual invoicing, and the higher contracted minimum monthly fee the provider charges instead. It is calculated as: minimum monthly fee minus (service charge percentage multiplied by that month's invoice volume), floored at zero when the percentage charge already exceeds the minimum. More detail + scope
This page covers
UK invoice finance minimum monthly fee shortfall calculation: what it is, why it applies in a quiet month, and how to calculate the gap between the percentage service charge and the contracted minimum
Not covered here
Comparing minimum fees and other cost lines across providers (see /tools/fee-comparison-template/), the full invoice finance lifetime cost (see /tools/lifetime-cost-calculator/), and general invoice finance costs (see /guides/costs/)
Calculator
Shortfall this month
£250.00
Percentage charge would be £500.00 (1% of £50,000.00); the £750.00 minimum applies instead, a shortfall of £250.00 on top.
Worked example: change the figures to your own. Illustrative; check the actual minimum, rate and any tiering in your own facility agreement.
| Component | Value |
|---|---|
| This month's invoicing | £50,000.00 |
| Service charge rate | 1% |
| Percentage charge (1% of £50,000.00) | £500.00 |
| Contracted minimum monthly fee | £750.00 |
| Shortfall paid on top | £250.00 |
Source: Market Invoice minimum-fee shortfall model
Illustrative. Check the actual minimum, rate and any tiering in your own facility agreement.
View as plain-text Markdown
### Worked example: £750 minimum fee, £50,000 invoicing, 1% service charge | Component | Value | | --- | --- | | This month's invoicing | £50,000.00 | | Service charge rate | 1% | | Percentage charge (1% of £50,000.00) | £500.00 | | Contracted minimum monthly fee | £750.00 | | Shortfall paid on top | £250.00 | Source: Market Invoice minimum-fee shortfall model Illustrative. Check the actual minimum, rate and any tiering in your own facility agreement.
“A one-off quiet month is normal and the minimum fee is doing exactly what it is meant to do. What I look for is whether the shortfall shows up most months, because that usually means the facility was sized for a bigger ledger than the business actually runs. At that point the right move is not to argue about the minimum, it is to ask for a facility priced for the volume you actually have, or to check whether a different structure altogether fits better.”
Why the minimum exists
A provider incurs largely fixed costs running a facility, credit control, account management, the funding line itself, regardless of how much you invoice in a given month. The minimum fee protects that fixed cost. It is not usually a penalty clause; it is how the pricing is structured from the start, and most facility agreements state it plainly alongside the percentage rate.
When it actually bites
Seasonal businesses, anyone who has just lost a large customer, or a business that simply doesn't need to fund as much of its ledger in a particular month are the ones who see this most often. If your invoicing is consistently near or below the level where the minimum starts to bite, it is worth checking whether a lower minimum, or a facility sized differently, would suit better. Compare providers on this and other cost lines with our fee comparison template.
The wider cost picture
The minimum fee is one line among several. See the lifetime cost calculator for the total cost of a facility over its term, and our invoice finance costs guide for every cost line explained.
Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd
Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind Market Invoice. He spent over three years as managing director of Penny, a UK invoice finance business, and his career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library.
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