Even the slightest hint on the topic of “business financing” can lead anyone to an immediate episode of anxiety and dread. It’s no secret that money matters can be complex, challenging and an absolute sore. They’re hard to come by and very sensitive in terms of spending and management. One wrong move and one’s beloved business goes down the drain. But this should not always be the case. Lucky for us, some alternatives were born out of need. Such was the case for spot factoring.
Today, discover why this method might just change the way you see business financing.
- Zero Debt – Surprise! This method is no loan. In fact, it’s not a type of debt and does not fall under the liability category. In other words, it comes free of interests and collateral. Spot factoring is rather an asset transaction that allows businesses to derive cash out of a specific sales invoice thereby ultimately advancing its value prior to its maturity and collection.
- Quickie – Unlike other financing methods, it’s pretty fast. Businesses need not wait for weeks or months to complete the application process, get an approval and have cash released. Spot factoring can be arranged within a day’s time (the fastest possible) and we’re not even kidding.
- Free for All – Majority of funding methods available in the market are exclusive. They’re limited to more established entities with adequate capital and sterling credit score. This method begs to differ. It can be used by everyone from startups to small and mediums scale enterprises to conglomerates and even to recovering entities. The secret lies in the fact that the provider banks not on the company’s creditworthiness but rather on that of the buyer to whom the invoice is attached to.
- Cash Flow – Because of its “advancing” nature, there is a quick injection of cash into the system. This paves the way for better liquidity, increased cash that is readily available and a stronger working capital.
- Onetime Deal – As the name suggests, spot factoring is a onetime transaction. This is also the reason why it is likewise known as single or selective factoring. It does not involve lengthy contracts and only requires a onetime fee, a value agreed upon by all parties and can be anywhere from 5% or less of the invoice’s total value. Moreover, businesses can choose which receivable to use and when allowing for full liberty and flexibility.