How Spot Factoring Can Grow Your Business
Spot Factoring differs from traditional Invoice Factoring as it
is primarily used to factor one large invoice, rather than a set
of smaller invoices.
A bank loan is an option to access funds, but its not always
the most suitable financial solution.
Spot Factoring, known as Single-Invoice Factoring or
Selective Factoring is a way for a company to improve its
cash flow without taking out a bank loan or selling any equity
in the business.
A (Factor) Factoring Company, can provide a client with a
one off basis in order for the client to receive their payment
quicker.
Spot Factoring provides Fast Cash within 24-48 business
hours.
Spot Factoring lets a business fund their working capital
without taking out a loan thus Spot Factoring is a lesser-
known financial method which businesses use to increase
their monthly cash flow by receiving access to more cash quickly.
Spot Factoring is an efficient way to obtain working capital
that can be used for fueling the growth of a company.
Selective Factoring (also known as Partial Debt Financing)
allows a business to select exactly which invoices the
Factoring Company (Factor) buys.
Spot Factoring is a one-time transaction: a business receives
an advance on a single invoice instead of committing to a
factoring relationship. Because they are only guaranteed one
transaction the Factor sets a minimum invoice amount yet
there is no upfront fee on Spot Factoring.
As with other forms of Invoice Factoring, Spot Factoring is a
type of funding whereby a client sells one of its unpaid
invoices usually a large debt invoice at a discount to a
Factoring Company the Factor. The Factor will then advance
a percent of the invoice amount, and then on receipt of the
final payment from the client’s customer (debtor), the Factor
will send the remaining balance less any factoring fees to the
client.
Get fast access to quick cash!
Clients searching for Spot Factoring need quick working
capital.
With Spot Factoring businesses are not obligated to factor all their invoices.
With Spot Factoring you choose which accounts you would
like to factor to turn your Receivables into Fast Cash.
Factoring can be done on a Recourse or Non-Recourse basis.
In a recourse situation, when the customer does not pay the
invoice within a specified time period, the (client) the
company that entered into the Factoring Arrangement with
the Factoring Company the Factor, the client is responsible
for providing a new invoice of equal value or pay the debt of
the original invoice to the Factor. The majority of Factors
prefer this type of factoring to minimize any financial risk
they assume within the Factoring Arrangement.
Single-Invoice Factoring is beneficial for a business that
needs quick access to cash funds.
The customer invoicing on the client’s invoice must always
have a good credit history, because the Factor will collect the
payments for the invoice debt directly from the client’s
customer.
With the funds from a Factoring Arrangement that is in place
a businesses can pay suppliers on time, pay their payroll and
inject money into any new project, purchase office supplies or
needed equipment to expand the business.
Selective Invoice Factoring can help smooth out many
business cash flow issues.
Spot Factoring is a flexible financial solution that
allows business owners to contract with a (Factor) Factoring
Company on an as-needed basis.
It should be noted that Spot Factoring Arrangements hold a
higher financial risk for Factors therefore Spot Factoring is
more expensive, with higher commission and fees charged
than standard Invoice Factoring.
With Non-Recourse the financial risk for Factors is even
higher as they assume all financial responsibility thereby
taking a financial loss when the customer does not pay off the
invoice.
Spot Factoring enables business owners to get fast convenient
cash instead of waiting for payments from their customers.
Spot Factoring has become a popular choice for small and
mid-sized businesses because Spot Factoring lets businesses
fund their working capital with flexibility without the need of
taking out a bank loan.
IN CONCLUSION:
Spot Factoring is the factoring of a single invoice, rather than
a set of invoices and Spot Factoring is beneficial for
businesses because it allows them to sell off one of several
larger invoices without having to enter into a long-term
financial contract.
When your business doesn’t qualify for a traditional bank loan
Spot Factoring can be a good alternative.
When you sell an invoice to a (Factor) Spot Factoring
Company, you will receive funding and there is no additional
debt incurred to your company by choosing to use Spot
Factoring.
The Factor, Factoring Company will always verify that as
their client your business is legally established.
Accelerate your cash flow from your unpaid invoices without
alerting your customers and without the need of any credit
check.
Avoid the gaps in your monthly cash flow.
More and more now days businesses are making use of Spot
Factoring and its becoming an increasingly popular financial
option used to improve business cash flow, allowing
businesses to gain access to the funds they need without
giving up any equity in the business.
Learn how your business can survive and thrive through a
Spot Factoring Arrangement.
Request more free information and give your business the cash it
needs.
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