When exploring invoice factoring, one of the most important decisions you’ll make is how your factoring program is structured.
Should you factor only select invoices when needed?
Or should you factor your entire accounts receivable portfolio?
In this guide, we break down:
- What spot factoring is
- What whole ledger factoring is
- Key differences in cost and flexibility
- Pros and cons of each
- Which industries benefit most from each structure
- How to choose the right option for your business
If you’re evaluating funding options, this article will help you choose the most strategic structure for your cash flow needs.
What Is Spot Factoring?
Spot factoring (also called single-invoice factoring) allows you to sell individual invoices on an as-needed basis.
You are not required to factor all invoices or commit your entire receivables portfolio.
How Spot Factoring Works
- You complete a job or deliver goods/services.
- You invoice your customer.
- You choose whether to factor that specific invoice.
- The factoring company advances 80–95%.
- Once the customer pays, you receive the remaining balance minus fees.
Best For:
- Seasonal businesses
- Companies with occasional cash flow gaps
- New businesses testing factoring
- Contractors with large one-off projects
- Companies that don’t want long-term contracts
What Is Whole Ledger Factoring?
Whole ledger factoring (also called full-turn or full-ledger factoring) requires you to factor all eligible invoices from your accounts receivable portfolio.
Instead of selecting invoices individually, you commit your receivables as part of an ongoing funding relationship.
How Whole Ledger Factoring Works
- You submit all approved invoices.
- The factor advances 80–95% of the total receivables.
- The factor manages collections and receivables administration.
- You receive reserve funds when customers pay.
Best For:
- High-growth companies
- Businesses with consistent invoicing
- Staffing firms with weekly payroll
- Trucking fleets with daily loads
- Companies seeking long-term working capital support
Spot Factoring vs. Whole Ledger Factoring: Side-by-Side Comparison
| Feature | Spot Factoring | Whole Ledger Factoring |
|---|---|---|
| Invoice Commitment | Single invoices | All eligible invoices |
| Contract Length | Often short-term | Typically ongoing agreement |
| Flexibility | High | Moderate |
| Cost per Invoice | Usually higher | Usually lower |
| Volume Requirements | Low or none | May have minimums |
| Cash Flow Stability | Occasional support | Predictable ongoing support |
| Best For | Occasional gaps | Growth and scaling |
Cost Differences: Which Is More Affordable?
Spot Factoring Costs
Spot factoring typically has:
- Slightly higher discount rates
- Transaction-based pricing
- Fewer long-term obligations
Why higher rates?
Because the factoring company cannot rely on consistent volume.
Whole Ledger Factoring Costs
Whole ledger programs often offer:
- Lower discount rates
- Better advance rates
- Reduced per-transaction fees
Why lower rates?
Because predictable volume reduces risk and administrative costs.
Key takeaway:
Spot factoring offers flexibility.
Whole ledger factoring offers cost efficiency and stability.
When Spot Factoring Makes Sense
Spot factoring may be the right choice if:
- You only need funding occasionally
- You have a large one-time contract
- You want to avoid monthly minimums
- You are testing factoring for the first time
- Your cash flow issues are temporary
Example Scenario
A construction subcontractor completes a $150,000 project but must wait 60 days for payment. Instead of factoring all receivables, they factor just that invoice to cover payroll and materials.
When Whole Ledger Factoring Is the Better Strategy
Whole ledger factoring is ideal if:
- You invoice consistently
- You need weekly or biweekly payroll funding
- You are growing rapidly
- You want predictable working capital
- You prefer a long-term funding partner
Example Scenario
A staffing company bills $500,000 monthly but pays employees weekly. Whole ledger factoring ensures steady payroll funding without gaps.
Industry-Specific Considerations
Trucking & Freight Companies
Trucking companies often benefit from whole ledger factoring due to:
- High invoice volume
- Frequent loads
- Ongoing fuel and payroll needs
However, owner-operators sometimes prefer spot factoring.
Staffing Companies
Staffing firms almost always choose whole ledger factoring due to:
- Weekly payroll
- Ongoing receivables
- Need for continuous cash flow
Construction Companies
Construction businesses may prefer:
- Spot factoring for large milestone payments
- Whole ledger factoring if managing multiple ongoing projects
Oil & Gas & Government Contractors
These industries may use either structure depending on:
- Contract size
- Payment cycles
- Project-based billing vs. recurring contracts
Risk, Control, and Customer Relationships
Both structures involve customer payment verification and professional receivables management.
With a reputable factoring company like EZ Invoice Factoring:
- Collections remain professional
- Customer relationships are protected
- Communication is transparent
The structure you choose does not negatively impact your clients when handled properly.
Questions to Ask Before Choosing a Structure
Before selecting spot or whole ledger factoring, ask:
- How consistent is my invoicing volume?
- Do I need ongoing funding or occasional support?
- Can I meet monthly minimum requirements?
- How sensitive is my cost structure?
- Am I planning to grow aggressively?
Your answers will clarify the best structure.
Hybrid & Custom Programs
In some cases, factoring companies offer hybrid structures that combine:
- Selective invoice factoring
- Volume-based pricing tiers
- Flexible minimums
At EZ Invoice Factoring, programs are customized to fit your business model — not the other way around.
Which Structure Is Right for You?
There is no one-size-fits-all answer.
Choose spot factoring if you value:
- Flexibility
- No long-term commitment
- Occasional funding
Choose whole ledger factoring if you need:
- Predictable cash flow
- Lower rates
- Long-term partnership
- Support for rapid growth
Why Work with EZ Invoice Factoring?
EZ Invoice Factoring provides:
- Transparent pricing
- Flexible structures
- Recourse and non-recourse options
- Fast approvals
- Funding within 24–48 hours
- Industry-specific expertise
Whether you need occasional invoice funding or a long-term working capital partner, we design programs around your cash flow goals.
Get a Custom Factoring Quote Today
Not sure which structure fits your business?
Contact EZ Invoice Factoring for a free consultation. We’ll review your receivables, cash flow needs, and growth plans to recommend the right structure.
Flexible. Transparent. Fast.
Visit www.ezinvoicefactoring.com to get started today.
