There are many small businesses that are bracing for a slowdown during the New Year across all industries. Smaller businesses typically lack the resources to get credit from banks and or suppliers during a credit crunch so they are often the hardest hit.

According to the National Federation of Independent Business (NFIB) their Index of Small Business Optimism fell 5.4 points to 87.5. This is the third lowest reading in the 35-year history of the NFIB survey.

This low score may be in part because of today’s difficult economic times, where it is difficult for a small business to get a loan from a traditional financial institution.

One financial strategy that many companies know about is called accounts receivable factoring. This single tactic can help keep a company’s cash flow going. However it is the business owners who are now using a newer factoring solution called single invoice factoring, or spot factoring, who know it is a more highly effective alternative.

Single invoice factoring is a discounting service that is simpler and superior to standard invoice factoring, receivable financing, receivable funding or assets based lending. Customers can sell credit-worthy invoices to factoring companies that handle spot factoring, and get immediate working capital, enabling them to ship today and get paid tomorrow.

The program allows choices of invoices to be factored, enabling the small business to retain most of their money, while spending the minimum fees to guarantee enough cash.

What has always been know as standard invoice factoring, has been around for more than 4,000 years. Why? Because many businesses do not get paid immediately for delivered products or services. In order to grow, every company needs cash.

Single invoice factoring benefits businesses that do not get paid for 30, 60 or 90 days by advancing up to 90 percent against invoices.

The factoring company will take a look at the creditworthiness of your customers and can fund within as little as 24 hours without expect to buy 100 percent of your company’s receivables. There are typically no minimum or maximum sales volume requirements with single invoice factoring. Each invoice purchase is a separate transaction and does not form part of a portfolio lending approach.

The transaction is modeled as a buy-sell transaction. Once the factoring company has completed its due diligence, which typically takes one to two business days, you are at liberty to offer invoices for purchase. Upon receipt of invoices, the company will check the credit of the debtor named on the invoice and make sure that the sale represented has been satisfactorily completed. Once this is done your customer will be advised of the purchase and you will receive your funding. At the end of the credit period the debtor pays the invoice factoring company directly, thus completing the transaction.

Single invoice factoring services speeds up cash flow and increases working capital. Many companies are already benefiting from this strategy, which is certain to be a much needed resource during the holidays and into 2009.

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Kristin Gabriel is a writer who works with The Interface Financial Group, North America’s largest alternative funding source for small business. The company provides short-term financial resources including invoice factoring and serves clients in more than 30 industries in the United States, Canada, Australia and New Zealand. IFG offers expertise in accounting, finance, law, marketing and banking. http://www.ifgnetwork.com