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Full Factoring or Spot Factoring – Which is Right for You?

What is the difference between ‘full’ factoring and ‘spot’ factoring? The answer to that might be – your comfort level.

“Ask any small business owner what the most important part of their business is and there’s a fair chance the answer will be cash flow.” States a Financial Post article featuring Liquid Capital entitled, “How to Make Your Company Bankable When Credit is Hard to Get.” June 9,2012

The article goes on to note, a business can be in “danger of floundering, not because of the absence of customers but rather the absence of resources.”

Factoring, which is widely used in the United States (US$300 billion) and the United Kingdom (US$600 billion) is underdeveloped in Canada at only US$4 billion.

“Factoring works in a straightforward manner – with the goal being to make the companies ‘bankable’ within three to four years.” (We have many testimonials to show that this does actually happen and would be happy to share them with you!)

Factoring offers two options, full factoring and spot factoring. What is the difference?

Full factoring buys all of your (credit worthy) receivables, while spot factoring allows you to sell just one invoice to the factor. It all depends on your cash flow needs and comfort level.

Would either of these options work for you? Maybe or maybe not, but I have a whole host of other solutions for financing that might be just what the doctor ordered. Feel free to call us to discuss!