Spot factoring is the one-off sale or financing of selected invoices rather than an ongoing whole-ledger arrangement. A business chooses particular eligible invoices and receives an advance, subject to transaction-specific pricing and verification.
How does Spot Factoring work in practice?
The seller selects one invoice or a small group of invoices rather than committing its full receivables ledger. The factor verifies the invoice, customer and delivery evidence, then purchases the approved receivable at an agreed discount. Because selection is transaction-specific, pricing and eligibility can differ from a continuing factoring facility.
What should a business document for Spot Factoring?
Retain the selected invoices, customer confirmation, assignment, advance, fee, reserve and final collection reconciliation.
What should a business verify before relying on Spot Factoring?
Flexibility often costs more per invoice, and repeated selective use can leave the business with its weakest receivables unfunded.
