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Spot Factoring

What is spot factoring, how does it work and is it the right factoring solution for my business?

 

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Spot factoring explained

Spot factoring is a way for a business to access funds by selling unpaid invoices to a 3rd party, a spot factoring company, on a one off basis in order to receive payment quicker.

The business will agree rates and fees with a spot factoring company and then decide which invoice/invoices it wants to assign to them. The spot factoring company, once the invoice is verified, will advance a proportion of its value, usually around 70-85%, to the business.

The spot factoring company will then chase up the invoice from the client and once paid to them in full will reimburse the business with the outstanding balance minus the agreed fees.

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A need to access funds quickly, a new business opportunity, rapid growth or even an unexpected slow period, spot factoring allows access to quick cash with no addition to debt and no tie in to contracts or ongoing fees.

If the business is seasonal with sudden increases in sales and a requirement for increased production costs, spot factoring could be more suitable to its immediate needs.

If it is making decisions around extending credit terms to clients, spot factoring will reduce the pressures on cash flow.

When there is a need to cover late payments from customers.


What are the advantages and disadvantages of spot factoring?

Advantages of spot factoring
    • Funds are received quickly. As invoices are sold to the spot factoring company, payment is received immediately
    • There is control over the arrangement. Spot factoring works in a way that allows a company to choose which invoice or invoices to factor. It is then able to raise funds as and when the need arises. If the company’s business is seasonal or there are periods where sales are low, there is no long term commitment to the finance provider and fees are only charged when the service is used.
    • It is a way of accessing financing when there are no other options available
    • The invoice is the only security required
    • There is no additional debt incurred to the company
Disadvantages of spot factoring
    • It is expensive; there are cheaper ways to raise finance though they may not be as flexible or accessible
    • The relationship between supplier and client may be affected as it becomes the finance provider’s responsibility to chase payment of the invoice
    • Spot factoring works best with large invoices

 


  • Have you thought about spot factoring as a cash flow solution for your business?

    Spot factoring allows you to release cash quickly from your unpaid invoices.

    As your lender, we can release up to 90% of your invoices within 24 hours. On payment of the invoice from your customers, we will then release the final amount minus any fees and charges. There are different types of invoice financing options available to businesses depending on the situation and the level of control they require in collecting unpaid invoices.

    We are an invoice financing company who offer a solution whereby payments are collected on your behalf managed by our team of expert credit controllers so you can focus on running your business. Our Confidential Invoice Discounting solution is offered to businesses who want to maintain their own credit control processes, therefore this remains strictly confidential so your customers are unaware of our involvement.

    The benefits of invoice finance companies such as Hitachi Capital
      • Boost your cashflow without having to wait up to 120 days for your customers to pay you
      • An invoice finance company with a revolutionary digital onboarding process, giving you quicker access to funds and the ability to take on new business remotely during this lockdown period
      • Release up to 90% of the invoice straight away, and the final 10% when the invoice is settled
      • No need to chase your invoices, we can do it for you
      • 6 month trial period followed by a rolling contract

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Spot factoring has been revolutionised with our digital onboarding process


Factoring company awards

Best Invoice Finance Provider 2021

Highly commended factoring provider 2021

Best Factoring Provider 2020


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Please note that costs are an estimate only and are based on the entered values. Your final quote may change once a Business Development Manager has assessed your business in more detail.

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Why choose Hitachi Capital Invoice Finance as your accounts receivable factoring provider

      • A 6 month trial period so you can be sure the product is right for you
      • Followed by a 6 month rolling contract – we don’t tie our clients in for long periods
      • A one fee solution with no hidden fees
      • Award-winning client service by our team of expert Client Managers
      • Our Relationship Management team are in the field to visit you in person
      • We are part of Hitachi Capital (UK) PLC, a company that is going from strength to strength – we’re here for the long term.

Smarter, Faster and Simpler Cashflow Finance with Hitachi Capital

Smarter, Faster and Simpler Cashflow Finance with Hitachi Capital

Smarter, Faster and Simpler Cashflow Finance with Hitachi Capital

Find out how we are revolutionising the way UK SME's access cashflow finance.


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0808 250 0859

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