Factors price in 2 common ways. A flat fee charges one percentage no matter when the customer pays. A time-based fee charges a percentage for the first period, then adds more for each additional period the invoice stays open.
Time-based pricing makes your customers' payment habits part of your cost. An invoice paid early is cheap, and one that drifts well past its due date costs more with every period.
Example: A factor charges 2% for the first 30 days and 1% for each 15 days after. A $25,000 invoice paid on day 50 costs 2% + 1% + 1% = 4%, or $1,000.
Also ask about extra charges, such as application, due diligence, wire or monthly minimum fees, and whether the fee comes out of the advance or the reserve.