Staffing Companies Factoring
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Factoring for Staffing Companies
Staffing Industry Overview
The staffing industry plays an integral role in the US economy and provides tens of millions of people with employment each year. From healthcare and manufacturing, to government contracting and service-based businesses, staffing provides trained employees that fuel economic growth. Between temporary staffing companies and permanent placement recruiting firms it’s estimated that there are over 20,000 different companies in the United States. Each of the companies are faced with the challenge of supporting payroll and growing their businesses at the same time. Our team at SMB compass specializes in providing invoice factoring to staffing agencies to help support ongoing working capital needs and business growth.
Staffing Agency Factoring
Staffing agency factoring companies are constantly faced with the need to support payroll while waiting 30, 60, and sometimes 90 days to be paid. When customer payment terms are extended it causes staffing companies to need high cash balances to ensure all of their employees are paid on time. While some have the capability to operate on cashflow alone, others turn to factoring companies for staffing agencies.
Invoice factoring for staffing companies enables staffing businesses to not only support their current payroll, but to add more employees and continue to expand their businesses. With the accelerated cash flow staffing agencies are able to source and onboard new clients without having to think about having the funding available for payroll. Factoring for staffing agencies also provides the additional liquidity needed for expenses that are not only tied to payroll. The advanced payments can also help support training, recruiting, and marketing efforts.
Benefits of Factoring for Staffing Agencies
Invoice factoring for staffing agencies provides a long list of benefits that help with both day to day operations and with business expansion funding. Also known as payroll funding, the main benefit for staffing agency factoring companies is employee retention. The most important asset of every staffing company is its employees and without them, it’s hard to operate. By utilizing payroll funding staffing companies are able to guarantee that all of their employees are paid on time. Another benefit is that invoice factoring is an off-balance sheet type of financing, with no amortization. This means that when invoices are factored, it is not recorded as debt on your balance sheet. In addition, there are no monthly payments that have to be paid. Staffing factoring companies are paid back when invoices paid.
Additional Benefits of Staffing Agency Factoring
- Employee retention by always paying payroll on time
- Available capital for advertising and marketing
- Off-balance sheet financing
- Cash management during seasonal periods
- Accelerating cashflow by collecting invoice payments on day 1Accelerating cashflow by collecting invoice payments on day 1
- Growth capital to onboard new customers
- More capital available for recruiting efforts
Choosing the right Staffing Factoring Company
With any time of financing it’s important that a business chooses the right lender to work with. Money is a commodity and is widely available, but that doesn’t mean it’s the right money for your business. Staffing companies, regardless of the industry that you’re focused in, is a specialty business that requires a specialty lender. When it comes to factoring for staffing companies it’s crucial to choose a factoring company with expertise in your business. The wrong partner can result in headaches that may adversely affect your business. Speak with a Lending Advisor today that specialized in factoring for staffing companies.
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