Single Invoice Finance or financing are terms that are often used to cover a number of different requirements such as:
1) Funding just one sales invoice in a one off transaction.
2) Selective Invoice Finance – selecting particular invoices to receive funding against.
3) Spot finance, spot factoring or spot discounting.
4) Single debtor finance – funding against just one debtor.
Each of the four options above are explained in turn below.
Single Invoice Finance
As the name suggests in some cases you can raise funding against just one single invoice. Some of the invoice funding companies will consider this if the circumstances are right i.e. the transaction size, the quality of the debtor and the nature of the debt. There are also a number of invoice auction platforms that will allow you to attract funding against single invoices or batches of transactions. This type of facility often appeals where client’s don’t want to be tied into a contract for any period of time but the cost of such funding will vary vastly between different providers.
Selective Invoice Finance
Some customers don’t just want funding against one single invoice, what they want is to be able to pick and choose which invoices they will receive funding against. This also allows them to control the cost of the facility. There are a variety of funding companies that will provide this kind of facility.
Spot Invoice Finance, Spot Factoring & Spot Invoice Discounting
“Spot” facilities could also be termed as “selective” and work as described above. “Spot factoring” includes a credit control service whereas “spot discounting” is just funding where the client handles their own credit control. “Spot invoice finance” would technically include both factoring and invoice discounting however the term is commonly used to describe “spot invoice discounting”.
Single Debtor Finance
Rather than finance against just one transaction, “single debtor finance” is funding against just one single customer or debtor. In some cases clients only have one single customer which is not a problem for some financers and depends upon the quality of the end debtor to a large extent combined with the nature of the sales. Some clients may want to select just one debtor of many against which to receive finance. Again this is possible although not all invoice finance companies will offer this type of flexibility.
The Alternative Option To Single or Selective Facilities – Whole Turnover
Just to complete the options it is worth mentioning the more mainstream alternative, whole turnover invoice finance. As the name describes all the sales of a business fall under the facility and hence funding is against all eligible invoices. This can dramatically boost the amount of funding raised and there is a cost advantage in financing all your sales, a kind of bulk discount if you like. In some cases funding just single transactions or selected invoices for small periods of time can be proportionately more expensive you need to consider your requirements and the option that is likely to be best for your business.