# Supplier discount versus funding cost calculator

A supplier discount is only worth funding when the discount dollars are larger than everything the funding costs you. Enter the invoice, the discount, the cash you would actually receive, the total you would repay and any other costs, and the calculator shows the net benefit in dollars. A negative result means paying early with borrowed money costs more than it saves.

## Hypothetical example: a $50,000 invoice with a 3% early-payment discount

| Line | How it is calculated | Amount |
|---|---|---|
| Invoice | From the supplier | $50,000 |
| Discount captured | $50,000 x 3% | $1,500 |
| Cash needed to pay early | $50,000 - $1,500 | $48,500 |
| Net cash received from funder | From the written offer | $48,500 |
| Total repayment | From the written offer | $50,600 |
| Full funding cost | $50,600 - $48,500 + $0 other costs | $2,100 |
| Net benefit | $1,500 - $2,100 | -$600 |
All figures are hypothetical. In this example, funding the early payment loses $600, so paying on normal terms is the better choice unless something else (a price lock, a priority allocation) is worth more than $600 to the business.

CalculatorNothing you type is sent anywhere. All math happens in your browser.

Invoice amountEarly-payment discount (%)Net cash you would receive from the funder (after any withheld fees)Total you would repay under the written offerOther costs not already counted (optional)Discount you capture$1,500**Full funding cost$2,100**Net benefit of paying early-$600**

Prefilled with the hypothetical example below. Replace every number with figures from your supplier invoice and your written funding offer.

## The formula behind the calculator

Net benefit = invoice x discount rate - (total repayment - net cash received + other uncounted costs). The first part is what the supplier takes off the bill. The part in brackets is everything the funding costs you in dollars. If the result is above zero, the discount is larger than the cost of funding it.

Each input has a specific meaning:

- **Invoice amount:** the full amount the supplier bills before any discount.
- **Discount rate:** the percentage the supplier takes off for paying early, for example 2% on terms written as 2/10 net 30.
- **Net cash received:** the money that actually lands in your account after any fees the funder withholds at the start. Use the number in the written offer, not the headline amount.
- **Total repayment:** every dollar you will pay back over the life of the funding, as stated in the written offer.
- **Other uncounted costs:** anything not already inside the total repayment or withheld from the cash, such as a wire fee or a separate charge listed in the agreement. Do not count the same fee twice.

## How to read the result

A positive net benefit means the discount pays for the funding with money left over. A negative result means the funding costs more than the discount saves, so paying on normal terms usually makes more sense. A result close to zero means the deal only works if nothing slips.

Look at two more numbers before deciding:

- **The cash gap.** Paying early requires the invoice minus the discount. If the net cash you receive is smaller than that, you still need to cover the difference from your own account.
- **The payment schedule.** The calculator compares totals. It does not show when payments start. Check the first payment date in the offer against when the goods will actually sell, so early payments do not squeeze normal operations.For a full walk-through of the decision, read [how to fund a supplier early-payment discount](https://primefundingnow.com/blog/fund-supplier-early-payment-discount/).

## Why this is not an APR calculator

This tool compares dollars for one specific transaction, not annual percentage rates. Annualized figures for short discounts and short funding can look extreme in either direction, which makes them easy to misread. The question an owner needs answered is simpler: after every cost, do I keep more money by paying early?

An APR spreads a cost across a full year. A supplier discount and a short-term funding offer often last weeks or a few months, so comparing two annualized numbers can hide the dollars that actually leave your account. If you want to compare an offer's annual cost with other financing, ask the funder for the disclosures that apply to that product, and keep that separate from this dollar comparison.

## When paying early can still make sense with a small loss

Sometimes a slightly negative result is acceptable because paying early buys something the formula does not measure. Be honest about what that is and put a dollar value on it before you accept the offer.

- The supplier offers a price lock or priority allocation on a product that often sells out.
- Paying early improves terms on future orders in writing.
- The goods sell fast enough that you would reorder sooner if the cash cycle is shorter.If none of these apply in writing, a negative result is a clear signal to pay on the normal due date instead.

## Using it with a credit line or one-time funding

The formula works for any structure, as long as you enter the cash you actually receive and everything you will repay for this purchase. With a business line of credit, use the draw amount and the repayment on that draw. With one-time working capital, use the figures in the written offer.

Businesses that capture supplier discounts several times a year often compare a [business line of credit for buying opportunities](https://primefundingnow.com/funding-solutions/line-of-credit-for-buying-opportunities/) with one-time funding. If you are weighing a discount on a specific order right now, the [supplier discount funding](https://primefundingnow.com/offers/supplier-discount-funding/) page lists the documents to gather. When you are ready, you can [apply online](https://primefundingnow.com/apply/) with the invoice attached.

## Frequently asked questions

**What does 2/10 net 30 mean?**

It is a common invoice term: take a 2% discount if you pay within 10 days, otherwise the full amount is due in 30 days. Enter 2 as the discount percentage and use your funding offer's figures for the cash received and total repayment.

**Where do I find net cash received and total repayment?**

Both should appear in the written funding offer or agreement. Net cash received is what reaches your account after any fees withheld at the start. Total repayment is every dollar you will pay back. If either is unclear, ask the funder before signing.

**Does the calculator store or send my numbers?**

No. The math runs entirely in your browser, and nothing you type is sent to Prime Funding Now or anyone else. You do not need to share contact details to use it.

**Is a positive result a reason to apply?**

It means the discount covers the funding cost on paper. Also check the payment schedule against your sales timing and keep a cash reserve. Applying is optional, and there is no obligation to accept any offer.

**Does applying guarantee funding for the discount?**

No. Applying lets funders review the business and the deal. The funder that reviews the full application decides and sets the terms. A decision is typically made within 24 hours of a complete application.

Apply: https://primefundingnow.com/apply/
Canonical: https://primefundingnow.com/tools/supplier-discount-funding-calculator/
Updated: 2026-10-17