Spot factoring

Quick facts

Spot factoring is a type of selective invoice finance, i.e. a way of borrowing money using your unpaid invoices. It’s similar to selective invoice discounting in that it allows you to finance specific invoices (or customers). The lender will take over credit control for your selected customers.

Spot factoring, like selective invoice discounting, allows you to unlock finance by selling specific unpaid invoices at a discount to a lender in return for a cash advance. You’re not handing your entire sales ledger over to a lender, as you would be with normal factoring or invoice discounting.

This can be useful if you take large orders from one customer, but your other invoices are smaller or irregular. By using selective invoice finance you can get advances for your large invoices, leaving the smaller ones unaffected. 

As with normal factoring, spot factoring is ‘disclosed’ – after all they will be paying back your factoring provider, not you.

You hand over credit control for the specific invoices you’ve chosen to finance to your finance provider. If you’d rather keep it in-house then you could consider selective invoice discounting. There other also other types of confidential invoice finance.

As with all types of invoice financing, your cash advance is a percentage of each invoice’s value. Once your customer has paid an invoice, the lender pays you the remaining balance minus their fee.

With spot factoring and selective invoice discounting, the individual invoices you choose to finance don’t have to be from the same customer – you decide which ones you finance and which ones you choose to handle yourself.

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Disclaimer: Swoop Finance Pty Ltd (ABN 52 644 513 333) helps Australian firms access business finance, working directly with firms and their trusted advisors. We are a credit broker and do not provide finance products ourselves. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Swoop Finance Pty Ltd can introduce applicants to a number of providers based on the applicants’ circumstances and creditworthiness, we may receive a commission or finder’s fee for effecting such introductions. Swoop Finance Pty Ltd does not provide any kind of advice and in giving you information about providers products, we are not making any suggestion or recommendation to you about a particular product. Offers of finance are subject to a separate assessment process by the provider and subject to their terms and conditions. If you feel you have a complaint, please read our complaints section which is contained within our terms and conditions.

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