Spot factoring

Spot factoring is a way for a business to access funds by selling unpaid invoices to a third party, usually a specialist spot factoring company, on a one-off basis to receive cash quicker. The spot factoring company will agree fees and rates with the business, and then select which invoices it would like to assign to them. Once the invoice is verified, the spot factoring company will advance a proportion of its value to the business.

Following this, the spot factoring company will then chase up the invoice from the client, and once the invoice is paid in full, the business is provided with the outstanding balance minus any pre-agreed fees.

Spot factoring allows access to quick cash with no addition to debt and no contracts or ongoing fees. If a business is seasonal with sudden increases in sales and a requirement for increased production costs, spot factoring could be more suitable to its immediate needs than traditional business finance.

Benefits of spot factoring

  • Support other facilities
  • Contract flexibility
  • Quickly release funding
  • Cost effective