Spot Factoring Allows for an Easy, One-Time Infusion of Cash


The number of financial tools and services available to small businesses has multiplied in recent years, and that is undeniably good news. Small companies used to be forced mostly to wait in line for the attention of traditional bankers, with most of these financial professional preferring, by far, to focus on other things. Over the years, however, a new generation of lenders has found ways of identifying and serving the needs of smaller companies better. The flexibility and accommodation they afford often turn out to be exactly what small businesses need.

For instance, it used to be that factoring of any kind was generally out of reach of the smallest companies, but that is no longer, by any means, the case. In its most basic outlines, factoring is the handing over to a specialized lender of the ability to collect some amount that might be due to a particular company. Generally speaking, the companies that offer this service, known as factors, used to prefer either to work with larger businesses whose individual invoices would be substantial or to forge binding, longer-term arrangements with smaller clients.

Unfortunately, that latter style of doing business often conflicts with the goals of smaller companies, especially those that do not plan to remain that way for long. While some factoring help might be welcome from time to time, this is not necessarily to say that paying to have every invoice from a particular customer converted would be satisfactory for very long.

In recent years, factors have become much more accommodating of this fact. Simple, one-time, spot factoring arrangements have become much more accessible to smaller businesses, as a result, with no need to commit to having each future invoice for the same customer factored, as well.

Because of this, small companies that could occasionally use an infusion of cash to help with balancing their books now have a much more flexible and suitable way of obtaining it. While small companies still face plenty of challenges compared to their larger competitors, the increasing availability of tools like this one and others means that the gap is closing with every passing day and making success on this end of the scale that much easier to achieve.