Spot factoring also known as single invoice factoring and selective factoring is relatively new to the UK but has been around much longer in the USA and elsewhere.
Spot factoring is ideal for those companies who don’t need to factor all of their turnover and don’t need funding all of the time as the beauty of the system is that it allows companies to raise working capital against sales invoices as and when required without having to pay charges for funding that they neither need nor take up. Traditional factoring requires a company to submit all of it’s sales invoices to the factoring company.
Spot factoring has other quite significant advantages over the “regular” product in that there are no minimum contract periods so if a company wishes to cease factoring they just do so. Likewise there are no minimum charges so there is no financial penalty for not using the facility and one can just “dip in and out” as needed which is why many companies who haven’t wanted or needed to factor whole turnover are now looking at spot factoring as a viable option.
What is Single Invoice Finance or Spot Factoring?
Single invoice factoring also known as selective factoring is an innovative product that only arrived in the UK comparatively recently but it has been a popular factoring product in the USA and elsewhere for quite a few decades now.
Unlike traditional factoring arrangements that deal with whole turnover, single invoice factoring has been developed to benefit companies who’s working capital requirements vary month by month and who don’t want to either enter into a twelve month agreement or pay minimum annual fees but would rather just factor sales invoices as and when they need extra liquidity.
Other advantages of single invoice factoring are that there are no setup fees, no minimum annual fees, no lengthy agreements and the spot factoring companies that we deal with can provide funding within a couple of days from initial enquiry.
Spot factoring for the construction industry
In addition to the types of trades and businesses that tick all the boxes for regular factoring the spot factoring companies that Factoring Solutions have elected to deal with will also welcome business from the construction industry as unlike the vast majority of factors they will happily fund against Applications for Payment which makes it very suitable for construction industry subcontractors operating large contracts that the regular factors aren’t interested in.
There are several single invoice factoring companies now operating in the UK with slightly differing operational requirements in each case and Factoring Solutions has relationships with several of these players in order to enable us to introduce clients to the most suitable spot factoring company for their individual needs.
If you would like to know more about this innovative product please feel free to call Factoring Solutions on 01827 707680 to discuss your specific requirements with no obligation whatsoever and as with any other form of factoring or invoice discounting we will never charge you any fees for our services