Need a quick one-time infusion of cash for your company? Spot factoring just might be the answer.
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.
I know of a company in Australia that does spot factoring called Fifo Capital, they came to see us recently obviously its more expensive than traditional factoring I guess its the flexibility of picking and choosing what to finance…..good post
I need $10,000 until December 15 I am willing to pay high rate for use of the money.
Thank you
Thomas A. Talley