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Spot Factoring

16 Sep

Spot Invoice Discounting »

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We have recently been contacted by a company offering spot invoice discounting. I was very excited as we often get requests from businesses looking to discount a single invoice on a confidential basis. I thought that this was the solution.

In essence it is badged up as invoice discounting because the client does the credit control. In fairness the same could be said about spot factoring. The credit control is also done by the client. In both spot factoring and spot invoice discounting the customer/debtor is required to pay the lender directly.

Unfortunately, to my knowledge there is not confidential spot factoring or spot invoice discounn available as I type.

If anyone know different please let us know.

 

20 Aug

Selective Factoring – Case Study »

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Selective factoring was recently set up by Smart Factoring Quotes for a security company based just outside Chester in the North West of England. They had landed a large contract worth over £400,000 over 3 months. They had to invoice monthly on 90 day terms and yet they were paying their security staff weekly.

They approached with a view to spot factoring the 3 individual invoices. We looked at their options and found that selective factoring was by far and away a cheaper option. Selective factoring means that you factor all the invoices of a particular debtor whereas spot factoring means you can pick and choose individual invoices. The difference in this instance is subtle but the difference in cost was dramatic.

Selective factoring worked out almost 10 times cheaper in this instance. The facility will allow our client to take on a lucrative contract and meet it’s weekly wage demands. Profits will be increased because of the selective factoring facility.

The most suitable solution for your business will depend on your own individual requirements. Contact us today on 0845 863 0738

16 Aug

Smart Factoring Quotes – New Improved Website »

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Smart Factoring Quotes are proud to announce the launched of their new and improved website.

Our aim has always been to provide business owners with a balanced view on invoice finance. The new site is more informative and we want to be the preferred source of online information for business owners looking for an invoice finance facility. We want to empower business owners to make an informed decision. That informed decision can be about choosing whether or not to use a form of invoice finance, which facility to use or which lender has offered the most competitive terms for their business.

If you are a business owner who is considering entering into an invoice finance agreement or reviewing your existing arrangements make Smart Factoring Quotes your first port of call.

 

17 Apr

Selective Factoring »

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Selective factoring allows you to choose which invoices you factor. This means that you can turn selective factoring on an off as required.

If you have a sporadic requirement for working capital selective factoring can be a cost effective solution for your business.

How does selective factoring work?

  • Selective factoring allows you to notify a single invoice or a batch of invoices to be financed.
  • The selective factoring company will conduct some due dilligence.
  • Once they are happy to deal with you you sell them the invoices.
  • The selective factoring company will check that your customers are happy with the products or services you have delivered.
  • They will advise your customers that the invoices have been purchased.
  • You are provided funding by the selective factoring company.
  • On the due date the customer pays the selective factoring company.

If you require selective factoring please contact Smart Factoring Quotes.

13 Apr

Single Invoice Factoring »

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Single invoice factoring, often called spot factoring, is available via Smart Factoring Quotes.

If you are looking to factor a single invoice or a batch of invoices this is possible. Traditional factoring and invoice discounting facilities typically require a lengthy contract that will attract a service fee whether you use the facility or not.  Spot factoring attracts a simple charge which is a small percentage of each invoice and you can pick and choose when to use the service and which invoices you finance. The big advantage compared to traditional invoice finance facilities is the flexibility – you can access cash when you need it rather than being tied in to lengthy contracts that require every invoice to be notified.

How does spot factoring work?

The spot factoring lender purchases your chosen invoice at a discount providing you with the cash you need to buy new stock, pay wages or pay suppliers. When the invoice is due your customer pays the spot factoring lender in full. The spot factoring lender will provide you with the balance that they owe you less their charges.

Criteria For Spot Factoring

Spot factoring is available to most businesses that sell to other businesses on credit terms. You could access spot factoring even if:

  • you are a fairly new start business
  • you are in the construction sector
  • you have had recent credit issues

The focus is really on the financial strength of your customer. Are they able and willing to pay for the goods or service that you have provided?

What is the process in applying for spot factoring?

  • Once you have spoken to Smart Factoring Quotes and selected a suitable spot factoring provider you would make contact with them.
  • The spot factoring lender would undertake some simple due dilligence which will take a few days.
  • Then you can choose some invoices to for the spot factoring company to purchase.
  • The debtor named on each invoice would be checked for credit worthiness.
  • The spot factoring company would also check that the sale described on the invoice had been completed satisfactorily.
  • Upon completion of these checks the debtor is advised that the spot factoring company has purchased the invoice.
  • You are then paid for the purchased invoice or invoices.
  • When the invoice is due the debtor pays the spot factoring company directly.

Benefits of Spot factoring

  • leaves you in control of your business as you can choose which invoices you finance
  • flexibility
  • cost effective way of accessing working capital in an ad hoc manner
  • fast and flexible service
  • available to the construction sector

If you are considering Spot Factoring contact Smart Factoring Quotes on 0845 863 0738

22 Aug

Construction Factoring »

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Construction Factoring is challenging for invoice factoring companies for a number of reasons.

Any invoice factoring company wants to know that the value of any invoice that they have funded against is secure. In the event of business failure they want to be able to approach the clients customer and request that the invoices they have taken good title to are paid in order to recover their position.

With this in mind if you consider how the construction industry operates you will see how this can cause issues for invoice finance companies.

In the first instance most contractors within the construction industry raise ‘applications for payment’ rather than invoices. As such invoice factoring companies cannot take good title to the applications in the traditional manner.

The work done is usually measured weekly, monthly or against specific milestones and as such applications or invoices are raised for a part completed project. Should the contractor fail to complete the project then liquidated damages can come into effect which render the outstanding invoices worthless. As such any invoice factoring company would not recover their position against these invoices.

Retentions at the end of the contract can also cause issues for invoice finance companies but these effect the prepayment level rather than the ability to provide funding.

Bad news for the construction contractor looking for a flexible working capital facility? Well, it is not all bad news. Smart Factoring Quotes have lenders who can provide invoice finance facilities to construction contractors. Get in touch today.

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