Spot Factoring

What is Spot Invoice Factoring?

Spot factoring is the one time or occasional selling of your invoices to a factor. It is different in a couple of crucial ways versus a traditional factoring company relationship.

  1. There is no long-term contract

    Most Factoring relationships will have six months to an 18-month contract. This way, you know you can get your needed working capital every week. Also, the Factoring Company knows that they will be able to employ a certain amount of money every week for your use.

  2. Spot factoring is typically more expensive

    Since it is a one time or infrequent transaction, the cost for the AR Factor to do its due diligence cannot be spread over the length of their contract with you. If they buy one single $50,000 invoice from you and they don’t foresee another transaction with you all costs of searches and credit checks must be covered in this single transaction. Because of this “one and done” component, implied risk per transaction is higher.

  3. Fewer Invoice Factoring Companies offer this service

    You like a client that sticks around for a while. So do most Factors. That is why the universe of Spot versus Traditional factors is smaller. You will have fewer choices to pick from if you decide Spot factoring is better for your situation.

  4. Is your AR unencumbered?

    If you have a line of credit in place now or your accounts receivable are pledged in a UCC filing, this will make spot factoring even more difficult to qualify for. A traditional factor has an incentive to negotiate with your other lender on a subordination agreement or tri-party agreement to free up your Invoices so they can advance your working capital against them. This is a time consuming and costly proposition to undertake if they are doing just one transaction with you.

However, there is good news! Businesscash.com has been offering Spot Invoice Factoring since 1998, and we have a team dedicated to these type clients. If together we decide this is your best avenue then we want to help.

Get spot factoring at great rates. We understand your needs. Call (888) 400-5930 or use the fast, safe & secure online funding application.

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