The Factoring Method to Sustain Any Business during Cash Squeezes

by Demarco Gonzalez | August 19, 2017 6:50 am

Spot factoring which is commonly called as single invoice factoring[1] is a method in which you trade only one invoice rather than a lot of invoices to a factoring company that charges a small service fee for their services and provides you with a cash advance upfront.

The company comes in like a middle man between you and the buyer when you bring them into the picture. They also offer some credit collection facilities for additional fees. When the buyer pays he has to pay for the company and then once the transaction has been made the company will reduce all their fees from that amount and turn in any of the remaining amount to you.

How it helps for mutual gains.

It works just the same way like traditional factoring. Here you sell your invoice to a factoring company that provides you with immediate cash advance. This will be very helpful for all parties as this happens you will have cash to grow your business till the customer pays and the customer gets enough time to settle his debt. The company also will be able to do their business by earning a fee from you.

For whom is this method available?

It’s available to all businesses that conduct their functions using credit, in a business to business basis which has payment periods from 30 to 60 days and not more than 120 days. You will not have to provide them any income information or bring in any guarantors.

The things they will require mostly is valid invoices and a guarantee that the customer you sold the goods are financially strong. Even if you are a new business owner if you meet the above qualifications they will lend you cash advances and help you to sustain your business.

Advantages of using this method

This method is very useful since it’s quick and allows you to get cash within a short duration of time like within 24 hours. It’s also a onetime short contract and at the end of it you will not have to pay any debt. Unlike other traditional factoring you will not have to turn in all your invoices and instead you can turn in only a single invoice in exchange for an upfront cash advance[2].

  1. single invoice factoring:
  2. upfront cash advance:

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