Owners of temporary staffing agencies often turn to staffing factoring to meet their biggest challenge: paying their employees on time, every time, when their customers wait weeks or months to pay their bills. A temporary staffing agency is especially challenged when customers require longer payment terms, such as 45 or 60 days.
Factoring companies for staffing agencies close that gap between weekly payrolls and customers’ payments. Temporary staffing agency factoring is one of the quickest ways to ensure that you’re meeting your payroll obligations. When you turn your accounts receivable into instant cash in your pocket, you can grow your company without turning down business based on a potential customer’s longer payment terms.
Staffing Factoring Companies
Since it can take weeks and even months to recruit, train and place temporary staff in positions, staffing companies face a significant delay before they begin receiving a return on their investments of time and resources. In the meantime, those workers need to be paid every week. Keeping up with payroll in the face of delayed income has been a continuing challenge in the past, but today staffing agencies work with staffing factoring companies. The companies specialize in turning unpaid invoices into instant working capital for payroll and other expenses. Also called payroll financing, staffing invoice factoring has been a preferred source of funding for both the temporary staffing industry and permanent placement companies for a variety of reasons.
Staffing Agency Factoring Benefits
- Speeds up the staffing company’s cash flow with money upfront
- Stabilizes revenues during seasonal ups and downs
- Helps retain good employees with on-time paychecks
- Does not add debt to your balance sheet
- Gives you access to funds you’ve earned without waiting 30, 60, or even 90 days
- Provides value-added benefits such as credit checks and collections services
- Offers working capital based on customers’ credit history, not your credit score or collateral
What makes a good factoring company for a temporary staffing business?
Look for a factoring company with specialists who know the temporary staffing industry and help temporary staffing business owners reach their business goals every day. You want to work with professionals that understand your business challenges and offer supporting services as well. Besides offering competitive factoring rates and quick payments on your invoices, a good temporary staff factoring company can also provide services such as payroll checks and payroll reporting that can make your day-to-day operations run smoothly.
In today’s changing economy, look for a well-established company with a strong track record through all kinds of business cycles. Ask about any and all fees – some companies may seem to offer low rates, but their “hidden” charges and extra costs can add up fast. Find out if the company is affiliated with leading professional associations such as the International Factoring Association, which sets important ethical standards and practices.
Staffing agency funding solves the challenges that staffing companies have when juggling revenue and expenses. On top of meeting payroll and payroll taxes, agency owners must keep up with office rent, in-house salaries, advertising, reaching out for new clients, and more.
Factoring Temp Staffing Agencies
Staffing agencies often face cash flow concerns – and that’s where the benefits of factoring come in. Invoice factoring is fast becoming the preferred financing option in the staffing industry, providing agencies with revenue when they need it most. Factoring can fuel a company’s growth by improving cash flow and freeing up the owner’s time for marketing to new clients and broadening the search for qualified employees.
Using the services of a reputable factoring company – with professionals who understand the staffing industry – offers substantial benefits:
- Factoring provides a steady source of working capital.
- Funding can often be set up and approved in a matter of hours.
- Time-saving office services are available, including credit checking, invoice preparation, mailing and collections.
Factoring companies give you access to immediate funds to cover your payroll whether or not you have a strong credit history or extensive assets. A factoring company will purchase your unpaid invoices and advance your company the invoice amounts in just a few days. You qualify for this advance based on the creditworthiness of your clients, not your payment history. Factoring is not a loan: you stay current with payroll, insurance, taxes, and other expenses without incurring debt.
Partnering with a factoring company that specializes in staffing agencies factoring can take you a long way toward maintaining smooth cash flow and building your business. Not only do staffing agency specialists understand your business model and challenges, but they may also offer value-added services such as payroll management support that will help you with the day-to-day running of your business.
Payroll Financing for Staffing Companies
As the owner of a staffing agency, you are juggling many priorities, from recruiting and marketing to client and worker retention. You need to make sure that your workers are paid promptly and that your bills for workers’ compensation, insurance premiums and tax payments are paid on time. Staffing agencies factoring can be a game changer in your business. When you factor your invoices, you can rest assured that you will be able to make payroll each week and have funds available for your other expenses. No more waiting 30, 45, or even 60 days for clients to pay you on work that has been completed!
Interstate Capital, one of the largest independently owned factoring companies in North America, has been helping staffing agencies succeed with customized cash flow solutions since 1993. Staffing company owners have found that partnering with Interstate Capital has given them the financial breathing room they need to maintain and grow their business, while meeting their payroll cycle on time, every month.
Interstate Capital factoring professionals provide support for staffing company owners every day, advancing them up to 100% against their invoices. These staffing specialists know both the industry and its business models and have experience with staffing companies in a variety of industries, including:
- Nursing and Medical
- Information Technology (IT)
- Office and Clerical
- Industrial and Manufacturing
- Janitorial and Maintenance
- Hospitality and Food Services
Factoring with Interstate Capital is the ideal solution for staffing agencies to ensure that you have a positive cash flow year-round. Get an instant factoring rate quote today.