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A quick solution to an unexpected late payment or a cash flow blip could be, to factor specific invoices that are causing you issues. This gives you the opportunity to focus on the business and not have to worry about unpaid invoices.
What is spot factoring?
Spot factoring, aka single invoice factoring, is a relatively recent product in the UK and it is growing in popularity year on year. We understand the benefits of this product for many B2B businesses and as a result, we work with a range of lenders to offer spot factoring for a cash injection solution.
Traditional factoring can be a long term commitment to deal with a company’s ongoing cash flow finance needs whereas spot factoring is a short term arrangement to deal with a specific financial need.
Acting as a financial stopgap, spot factoring provides you with the working capital you require so you don’t fall behind on your liabilities. Cash is usually made available within 24 hours and charges for this facility are based on how long funds are lent and the percentage being advanced.
What will the factoring company do for my business?
You raise the invoice you would like to factor against and send a copy of it to your lender; your factoring company will then advise your customer that the invoice has been sold and they will also confirm that the sale between yourself and your customer is complete.
Your factoring company makes the cash available to you, based on an agreed percentage, within 24 hours providing your business with an instant cash injection. Your lender takes charge of collecting the debt from your customer and once payment has been received, the remaining balance will be provided to you, minus the factoring company’s fees.
Factoring companies are keen to check the creditworthiness of your customer before agreeing to factor the invoice instead of examining your business’ finances like a bank would do to approve funding.
What are the benefits of spot factoring invoices for my business?
We listen to your business’ needs and work hard to find the factoring company which can offer you exactly what you need including:
- Flexibility and quickly arranged – Cash is usually available within 24 hours limiting the effects of slow paying customers on your business and cash flow.
- Up to 90% of the invoice value made available – Leaving you with cash to plug financial gaps, meet your liabilities and keep working on your projects.
- No long term contracts – Each transaction is separate so without a long-term contract, there are no exit fees.
- Cost-effectiveness for one-off transactions – Compared to the cost of entering a long-term invoice finance contract which perhaps your company does not need, spot factoring is cheaper and more beneficial financially.
- Having the ability to use the facility only when you need it – When business is good and customers pay on time, you don’t have to use the facility, but it will still be available for you when you need it.
- No minimum annual fees, set-up fees or exit fees – You only pay what you need to, there are no hidden charges.
Are there any risks associated with spot factoring?
- It is not suitable if you need to raise finance regularly – Spot factoring can be more expensive for regular use, therefore, switching to a regular factoring facility may be cheaper.
- The size of your invoices – Generally factoring companies are looking to finance large invoices.
What can we do for you?
If an unpaid invoice is holding back your business and you need an injection of cash, but don’t want to use a whole factoring facility, spot factoring can be an excellent means of bringing in funds. One big invoice can have a huge impact on a business, so the sooner that money is brought in, the better.
With our experience, expertise and know-how in the industry, we are brilliantly positioned to help secure a spot factoring facility for you. We work closely with 50 of the top blue-chip funders, gaining access to exclusive rates and deals. If you’re curious about what we can offer you, we operate nationwide and offer a free consultation, with a no-obligation quote.
Some of the partners we work with...
Why Choose Us?
WF Financial Solutions is an independent broker of invoice, asset and trade financing solutions with links to lenders of all sizes and specialties. WF Financial Solutions has helped many clients through the range of lenders and their varying services and are proud to offer advisory and introductory services to finance providers that suit your needs.