Financing a single invoice is also known as “spot factoring.” This happens when a company is only interested in factoring one invoice, one time. Frequently the invoice being financed is for a significant high dollar amount. Most factoring companies will not do spot factoring due to the risky nature of the transaction. If there is a problem with the account debtor paying the one particular invoice there will be little or no recourse available to achieve repayment.
If a factor were to proceed the first step would be to determine the creditworthiness of the customer who owes on the invoice. Unless the account debtor is a Fortune 100 brand, there will be little appetite to fund. Also a factoring company will look closely at the terms in the contract. Is the language specific enough regarding payment for completed services? But the main reason a factor will be reluctant to do spot factoring is the amount of work that goes into getting the account setup with the client and doing proper due diligence on the client’s customer. A factoring company would much rather rely on an ongoing factoring relationship with a variety of account debtors.