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What is spot factoring?

Spot Factoring and Selective Factoring describe the process of raising finance against individual invoices.

What is spot factoring?

Spot Factoring and Selective Factoring describe the process of raising finance against individual invoices. It means releasing cash locked up in invoices, one invoice at a time. Spot factoring or single invoice factoring is a new alternative to traditional wholesale factoring facilities.

  • Spot factoring facilities provide greater flexibility and enable you to sell a single invoice or bundle of invoices when you need it most
  • Without entering into lengthy and potentially expensive contracts
  • Spot factoring allows faster access to capital

Spot factoring is defined as the purchase of a single 'one off' invoice as opposed to full or repeat factoring. If not disclosed, it can be known as selective invoice discounting. A defining feature of small and medium sized businesses in the UK is the volatility of their monthly cash flows. Traditional factoring can be ill-suited to these cash flow fluctuations: minimum monthly fees penalise companies at times when they do not need to draw down on funds.