Here’s why we do spot factoring:

1. Control: We prefer to give our clients the control over their own AR. They know week by week what their working capital needs are better than we ever will. If they have a 100K invoice, but only need 20K this week – then we’ll do that for them. Why pay the spot factor rate on money you don’t need? That needlessly ties my clients hands behind their backs.

2. Soft Sell: It’s easier to tell a prospect (particularly after they look at spot factoring rates) that they can factor as much or as little as they like. Hire us and fire us in the same day if you feel like it.

3. Higher than Average Referral Rates: For those spot deals we organize, we have seen over the years that our clients are happier in those situations compared to non-spot deals. Happier clients = more referrals = more business for us.

Steve Ontiveros of Resource Business Partners can be found online at www.wefactor.com.

Looking for more information on spot factoring?   See the FactoringInvestor.com article entitled “What is Spot Factoring?”

This business financing solution enables a company to receive an advance on a single outstanding invoice.

While traditional factoring arrangements are often structured on the expectation of monthly reoccurring business, spot factoring can be a one-time transaction. Also known as single invoice factoring, the business can obtain the working capital they need without lengthy contracts or ongoing commitments.

A Factor will review the invoice, confirm the goods or services have been delivered, and underwrite the credit worthiness of the debtor. Once the factor is satisfied they will advance a percentage of the invoice to the business, generally 70 to 90 percent of the amount billed. The balance is kept as a reserve to be released upon payment of the invoice less the factoring fee.

Since the transaction is based on a single occurrence a company offering spot factoring is likely to set a minimum invoice amount to make the accounts receivable purchase worth their time, effort, and investment.

While a factor might hope for future business, there is no obligation for the client to use these services in the future. This makes single invoice factoring a viable business financing strategy for companies that do not use or expect to use factoring in their normal course of business.