Selective invoice discounting, like spot factoring, is where individual invoices (or receivables) are sold to a third party at a discount to raise working capital.
Traditional factoring facilities are typically whole turnover, meaning a company must factor its entire sales ledger. This can become expensive and not reflect the most cost-effective solution for companies to raise their working capital.
Many small businesses have seasonal fluctuations in cash flow and so selective invoice finance would be a much cheaper solution.
Spot factoring, Spot invoice finance, or Single invoice factoring
Selective invoice discounting works in a similar way to spot factoring.
For a fee, invoice discounting companies can unlock funds tied up in an individual invoice so that your business receives a percentage of the funds without waiting for the end customer to pay. For a large invoice, this process can provide a significant cash boost for a business.
Invoice discounting allows you to keep control not only of your sales ledger but your client relationships too.
Many traditional invoice discounters don’t allow businesses to get finance against their entire sales ledger, despite the fact that fees are charged against the entire turnover of the business.
It can take a long time, typically several weeks, to get set up with a selective invoice discounting facility. However, here at Accelerated Payments, speed is one of our key differentiators and we have been able to reduce that time down to as little as 24 hours.
If you would like to discuss your requirements in more detail, visit our contact page.