Single Invoice Finance or Spot Factoring
There can be times when a business wants to improve cash flow
but doesn't want to consider a complete factoring
service or outsourcing credit control, as this could impact
customer relations. Sometimes a business might require
collection help with one or two invoices. It's possible to
obtain one-off invoice factoring against a single
The concept of single
invoice finance, or spot factoring, is still relatively new but
there's a small but growing network of
single invoice finance providers in the UK. Single
invoice finance is a solution that all companies can consider. It's
different to factoring in that it's the purchase of one or two
What type of businesses should consider
single invoice factoring?
Obviously a business that trades with only one customer would
benefit from single invoice finance, but it can also be useful for
businesses with seasonality. As the name would suggest, it's
ideal where you simply want to raise finance against one particular
customer and not against your whole sales ledger. It could be
that you simply want to raise funds against a specific project.
The flexibility of single debtor or single
invoice finance is making it a highly popular option. The
factoring companies offering these services tend to be very
Single invoice finance can work alongside other banking
facilities such as overdrafts or loans but is not suitable for
companies that already have a factoring or invoice discounting
service in place.
Get Your Quotes Now
What are the advantages of single invoice
finance or spot factoring?
Spot factoring or single invoice finance facilities are not as
intrusive as a full factoring service and generally the lender is
less controlling. A business can enjoy greater financial
flexibility picking and choosing which invoices to factor, using
the invoice funding service as when required.
Most single invoice finance agreements
don't have clauses that would lock you in and generally
there are no "break fees" when you leave a single invoice
contract. Your business remains in control of its ledger and
collection. In the main single invoice finance companies do
not come in between the business and its customers. Even so
you can often still release up to 95% of the invoice value.
Single invoice factoring can be completely confidential so your
customers remain unaware that the service is being used. The
relationship with the customer remains very much in the control of
your business and collection of the debt remains your
responsibility but the pressure of collection is reduced as you
already have the funds from your factoring company.
What's more, if your customers are aware that you're using a
single invoice finance company they may even feel obliged to pay
their bills more promptly further improving your cash flow.
Your customers will not want to put at risk their credit rating, as
non-payment to one supplier may impact their rating with
As with other factoring services when you use single invoice
finance security does not need to be offered to obtain the funds,
the factoring company will take the invoice as security.
A business can sell credit-worthy
invoices to the single invoice factoring company and receive
a direct working capital injection - allowing them almost
cash-on-delivery terms i.e. send today and get paid tomorrow.
As with other forms of invoice finance, a single invoice factoring
arrangement benefits businesses that won't get paid for 30, 60 or
possibly 90 days or more by paying up to
95% against an invoice value. The factor will
review the creditworthiness of your customer and will usually
provide funds within 24 hours. Generally there won't be
a minimum or maximum invoice value or turnover requirement with
single invoice factoring although some factors do have a minimum
invoice value of £3,000. Typically each invoice will be
regarded as an individual transaction and not part of a portfolio
but again there can be exceptions.
When the invoice factoring company completes its due diligence
process, which should generally take two or three days, you're able
to present invoices for single invoice finance. Although a spot
factor will examine the underlying business and take account of its
future prospects, the main concern is that the invoice being
purchased will be paid. Once the invoice factoring company receives
an invoice, it'll check the creditworthiness of the customer
invoiced and ensure that the sale to your customer has been
Once this has been done your customer will be informed of the
purchase and you receive the appropriate funds. At the end of
the period of credit your customer will pay the invoice factoring
Get Your Quotes Now
Single invoice factoring services improves
up cash flow and liquidates working capital. Many companies
are already benefiting this service and the take up is sure to
increase as it becomes better known.
There may well have been times when you've fulfilled a
significant order for a customer and you've had to use a vast
majority of your working capital deliver. Now until that
customer pays you the business will struggle for funds. In todays
climate it's likely that your local bank won't lend you money and
as a results perhaps your suppliers are starting to squeeze you
which in turn prevents you from completing further delivery of
Often a business looking to grow, perhaps even with a full order
book, can find its self hampered by a severe lack of working
capital. This is where spot factoring can help. Unlike
traditional factoring where the business, requesting the factoring
services, hands over their sales ledger to the invoice finance
company; with spot factoring you can use it as and when
required. You can turn it off and on.
While factoring has been around for centuries, single invoice or
spot factoring is a much newer advance in business finance.
It is a fantastic option to release short term cash; providing
those funds required for expansion.
Now, instead of waiting for 60, 90 or possible 120 days for
payment, your business can immediately invest the necessary cash to
support business growth. You're no longer hampered by the
whims of your customers payment policies, but single invoice
finance provides the access to a regular steady cash flow.
What are the disadvantages of single
invoice finance - if any?
If you're in an industry sector that often has disputed
invoices, queries or perhaps part-payments then single Invoice
discounting is probably best avoided. Single invoice finance
can be expensive which could mean reduction in your profit margin
however there are more factoring companies and spot factoring
market places available so rates are slowly getting more
As previously mention the facility won't work if the debtor
deemed to be of a poor quality and has a bad credit
Single Invoice Factoring
A single invoice finance facility can be used for a one off
invoice and can be utilised as little or as often as required.
In the main, there's no on going fee, just standard charges
and only when you decide to factor your invoices. With some
spot factoring companies there could be a one-off set-up fee.
The advantages of this kind of funding are probably obvious
especially for businesses that don't want to be tied to a full
factoring scheme. Of course if your business finds
itself using the single invoice factoring funding with increasing
regularity then it's probable that you'll then switch to a standard
Imagine having no cash flow restrictions
constraining your business growth.
Considering factoring or
invoice finance - get quotes
Buyers Guide To Single Invoice Finance (Spot Factoring)
Invoice Discounting or Spot Invoice Finance