Are you looking for a quick cash boost but don’t want to commit to financing your full sales ledger?
Spot factoring could be just what you are looking for. By using spot factoring, you are able to release the cash tied up in individual invoices.
Whether it’s to pay business costs or invest in growth, spot factoring enables you to get a fast convenient cash boost for your business.
What is spot factoring?
Spot factoring is a handy way to get the money you’re owed from your unpaid invoices.
It’s a popular choice for businesses of all sizes. You send your unpaid invoices to the factoring provider who will advance you up to 100% of the cash, usually in just 24-48 hours.
They also handle the job of making sure your customers pay up on time. When your customer pays their invoice, the factoring provider will take their fees and send you the remaining balance. It’s a straightforward and stress-free process
How does spot factoring work?
Business as usual: You do what you do best and sell your services or products to your customers and issue the invoice for payment.
‘Sell’ your invoices: You decide which invoice you want to ‘sell’. Your invoice finance provider will then buy the outstanding debt on that invoice.
Get your cash: Within 24-48 hrs you will receive up to 100% of the value of your sold invoice directly into your bank.
Customer pays their invoice: The invoice factoring provider will chase customer payments on your behalf. Once the customer pays their invoice the funds will go directly into the invoice finance provider’s trust account.
Receive the balance: Once the funds have been cleared and any pre-agreed fees and charges have been taken by the provider, you will receive the remaining invoice balance.
What are the advantages of spot factoring?
There are many advantages of spot factoring, here is a breakdown of what you may want to consider when considering this type of invoice finance.
Disadvantages of spot factoring
How much does spot factoring cost?
Fees are specific to each business and will vary on the provider, your annual turnover, and the workload involved. Always ensure that you discuss and understand the terms of your provider’s agreement before committing to using their services.
There is just one simple fee associated with spot factoring
Service Fee
This fee is made up of a charge for ledger management and a charge for the issuing of the cash advance. .
Keep in mind that fees can vary based on factors like your business type, the provider you choose, your annual earnings, and the level of service required. Before committing to a provider, it’s important to have a clear discussion about their terms and make sure you understand the agreement.
While there are fees involved, it’s worth noting that invoice financing can be a powerful tool for enhancing cash flow and enabling the growth of your company. It’s an investment in the smooth operation and expansion of your business.
Invoice Finance Calculator
Spot Factoring Calculator
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