Spot Factoring or Selective factoring is the process of producing funds against invoices your company carries.
Unlike traditional factoring, Spot Factoring allows you to select specific invoices to gain capital.
Factoring is the process of contacting a lender and lending the amount of money available in all of your invoices. So for instance, you have 10 invoices to send out to clients. You can borrow the total of those 10 invoices, generally very quickly. You send out the invoices to your clients then the factoring lender will complete the process by chasing up payments. They will hand over the money to you, generally about 85-90% of the funds so you can carry on with your business, whether that’s manufacturing, production or services. When all of the clients have paid up you will receive the rest of the funds minus a small fee for using the factoring company.
Spot or Selective factoring means you can pick out which invoices you want to borrow money against. Again, you send these out to your clients and pass on their details to the factoring lender. They will put the funds into your account generally within 24 hours and go about chasing clients for payment. Once the clients have completed their payments, you receive the rest of the funds minus a small fee.
Spot Factoring enables you to choose and be more flexible with your invoices. You can take an amount of money from specific invoices rather than taking the whole amount from all of your invoices.
This process allows companies to continue with their work and grow their business. Its quick, it’s simple and funds are readily available.
If you are stuck for funding solutions, and cannot wait around for 60 or 90 days for payments from your clients, consider Spot or Selective Factoring.