What do spot factoring companies do? Judging by their name, they’re financial firms that factor our receivables or invoices. In other words, they provide an advance of their value even before they mature allowing companies an immediate means to cash.
These providers have been labeled as lifesavers and more but if we were to summarize them in five words, it’ll have to be the following adjectives: redeeming, quick, debt-free, relieving and helpful.
As mentioned, they are lifesavers simply because they provide that needed bag of blood to an organization in need of it. Remember that money is the lifeblood to any organization and without it, nothing would and can work. Operations would be put on halt.
This service is unlike any other because spot factoring companies can provide for the financial resources in such a short amount of time. Think twenty-four hours quick! Yes, you’re eyes aren’t fooling you. These providers can release cash in as little as a day’s time which is a very stark contrast to majority of the options available in the market today. Additionally, it doesn’t come with as much requirements and restrictions.
Spot factoring is a service that comes free of liabilities simply because it isn’t one. It’s an asset transaction which involves the sale of the right to collect against an invoice/s. It doesn’t require asset-based or property collateral, comes free of interest (simple or compounded) and reflects in the books as a decrease in receivables, an increase in cash and a debit to an expense account for the fee involved.
In a world where financing, especially emergency and immediate ones, are very hard to attain, spot factoring companies makes it easier not only for the established organizations but also the startups, small to medium scale enterprises and even recovering entities that do not have the capacity to take on other financing options like bank loans and mortgages due to their strict requirements. They’re a breath of fresh air and a hug relief for users.
Of course if we were to end this list, we’d have to use this adjective to define spot factoring companies. Indeed, these firms have been a huge help in raising additional and immediate capital without the hassles and strings attached to a debt. They help reduce bad debts, hasten collections and even remove the burden of such administrative task. They’re very helpful to entrepreneurs and even that is an understatement.