Get Paid On An Existing Account Receivable with Spot Factoring
It’s a common dilemma for small and mid-sized businesses: You fulfill a large order and find yourself with no cash at hand to fill another large order until the first customer pays.
The solution: Reach out to Business Factors & Finance for spot factoring and eliminate that problem forever.
Spot factoring—also known as single invoice discounting, spot funding, spot factor or spot factor-funding—enables you to pay your suppliers now and have the funds necessary to fulfill new orders from other customers.
HOW SPOT FACTORING WORKS
With spot factoring, businesses sell an individual invoice to a third party (a “factor” or spot factoring company) and get immediate cash to continue operations and growth, without having to wait 30, 60, 90 days or longer to get paid for the initial transaction. With spot factoring, you can get your money now.
Here’s how it works:
- Your company submits a single invoice to Business Factors & Finance.
- We verify the invoice and get you simple credit qualifications (financial statements or other loan documents are never required).
- We assume 100% responsibility for getting your invoice paid, while you receive an advance of up to 96% of the face amount of the unpaid invoice.
- Funding is fast. Your company can be approved in 24 hours or less, without any consideration of your personal credit scores or business history.
- You pay no fees up front and enjoy a fast and simple application process.
- There is no additional debt or loss of equity, and no long-term contracts.
By factoring your invoice with Business Factors, you make no interest payments and spend no time, effort or money on the collections of unpaid invoices.
HOW DOES YOUR BUSINESS BENEFIT?
Every business has its own reasons to explore spot factoring, but the most common benefits include:
- Paying for expenses associated with rapid growth (staffing, payroll, new equipment, production increase, etc.)
- Covering ramped-up production costs associated with a seasonal business cycle or unexpected product demand
- Paying for new expenses related to increased payroll, equipment or machinery, facility lease space, etc.
- Seizing advantage of new business opportunities
- Covering working capital or operational expenses related to a slow business quarter
- Bridging cash flow gaps as a result of slow-paying customers
Remember, spot factoring does not incur any additional debt, nor is any interest expense generated through this process. Consider it a critically needed advance on a specified percentage of the invoice you submit—an advance on funding which you use in any way you deem necessary. Business Factors & Finance makes absolutely no requirement on the financing you receive as part of this process.
SPOT FACTORING VS. STANDARD INVOICE FACTORING – WHICH SERVES YOUR NEEDS BETTER?
Unlike traditional factoring, where the company requesting the factoring services renders all of their invoices to the factoring company, single invoice factoring works on an as-needed, one-at-a-time basis.
Spot factor funding from Business Factors provides instant cash, equal to a major portion of your invoices, often within 24 hours of shipping.
Both spot factoring and standard factoring services provide you with the same financial outcome—you get the cash you need right away, but the services differ in exactly how they are used.
One-time Use or Regular Use with Factoring Services
All types of factoring receivables depend upon the value of your current invoices. In every case, the invoice factoring companies will assess the creditworthiness and reliability of your current invoices. Once the value of these proofs of purchase has been verified, they will buy them from you—giving you the cash you need in less than 48 hours.
The key difference is simple, but crucially important, depending on your business needs: Single invoice factoring can be a significant one-time-only solution, whereas standard factoring receivables occurs continuously over a set schedule determined by you and the factoring company.
Some Industries Use Invoice Factoring Services on a Regular Basis
The nature of your business and industry—or the specific circumstances of your business operations—may determine whether you opt for single invoice discounting or standard factoring services.
For example, construction, manufacturing and transportation factoring generally occur on cyclical or planned schedule. This means that every month around the same time, for instance, you would submit your invoices to the invoice factoring company so that you don’t have to wait 30, 60, 90 days or longer to get paid.
Single invoice factoring (or spot factoring), on the other hand, may be the perfect answer for a business that needs factoring as a one-time solution, perhaps as a result of an unpredictable situation.
In some cases, this type of financing requires a more thorough investigation and verification process by the financial company in order to best evaluate the invoices and their worthiness. But spot funding can still be processed quickly, often with the same expediency as standard funding.
Specialists Can Help You Decide Between Factoring Options
If you are unsure which type of factoring services you will need due to upcoming changes in your business, we invite you to speak with a Business Factors specialist and they can help you decide. These specialists are customer service experts who understand this type of financing is new to a lot of people. They are happy to explain your options.
Spot factoring generally costs 3-8% of the total value of your invoices and is used when you just can’t afford to delay collecting on what’s owed to you by your customers. Though all factoring charge fees or percentages for their services, these costs are well worth it if it means fulfilling a large order, satisfying a key customer, or sustaining your business through difficult times.
We encourage you to check out our Invoice Factoring Learning Center to learn more about invoice factoring and how it can help your business.
Call Us Anytime 24/7
Few invoice factoring companies can provide the availability, the attention, the service, the terms and the speed of invoice factoring you get from Business Factors. Our business development representatives are available 24/7 to answer any questions you may have and to get you started on saying goodbye to your cash flow problems forever.
Apply online or learn more about Spot Factoring:
- What Is Spot Factoring vs. Standard Invoice Factoring?
- How To Spot A Profitable Client
- Invoice Factoring | Tips on Managing Late Payments
- Factoring Services | A Complete Guide
- How to Choose an Invoice Factoring Company
Factoring Specialties Available at Business Factors: