Choosing to factor a single invoice is generally known as “spot factoring.†It usually occurs when a service company is trying to make a large product purchase on behalf of one their customers. The service company doesn’t have enough credit established to make the purchase and gets stuck in a catch-22. Of course a factoring company cannot get involved until product has been shipped and an invoice is produced.
The drawback for most factors in doing spot factoring is that setting up to work with a client takes time and expense, which makes financing a single invoice not worthwhile. But in addition, the risk is much higher because there is no other revenue stream to mitigate the risk of the invoice not being paid by the client’s customer.
So if you are thinking of doing spot factoring, plan on talking to many firms until you find some that might be interested, and you will probably end up paying a premium charge for the service.