Staffing companies play a critical role in our economy. They help people get temporary or permanent jobs and they help the private and public sectors fill vacancies. However, owners of staffing agencies everywhere are constantly juggling challenges, from locating qualified candidates and signing new clients to staying on top of payroll and taxes and collecting on invoices.
Like any business, staffing agencies can struggle with the time difference between paying their employees and getting paid by the companies using their services. Many staffing companies can’t wait 30, 45, or 60 days to receive payment from their clients – they must pay their personnel every week! They also have overhead expenses that can’t wait, including office rent or mortgage payments, marketing costs, licensing fees, and taxes.
Cash flow issues can break a staffing business. Borrowing money from a bank means incurring debt, which can bring its own risky consequences. Staffing company owners also find that with today’s stringent loan approval processes, not all loan applications are accepted. An increasingly popular cash flow solution for staffing companies is invoice factoring.
Working with a factoring company that will buy your accounts receivables is a great way to alleviate the pressure during that gap between sending out your invoice and getting paid. Some factoring companies will even pay you up to 100% of the invoice value within 24 hours.
When researching factoring companies for your staffing business, consider these five points:
- Years of experience
Use a factoring company that’s been around a long time, at least 10 or 20 years. You’re looking for a track record of success and stability.
- Expertise with staffing companies
Look for a factoring company with professionals who specialize in working with staffing agencies. Factoring is not a one-size-fits-all solution, so your factoring company should have years of experience serving the staffing industry.
- Staffing industry knowledge
Whether your company specializes in administrative support, health care, IT, or construction staffing, you should partner with a factoring company that understands your business model.
- Competitive rates and flexible terms
The lowest factoring rates do not always bring the best financial arrangements in the long run. Some companies add on “hidden fees” and rigid policies that are not in your best interest. Be sure that the factoring company offers good rates without any surprises and flexible terms for the changing needs of your business.
- Additional factoring services
A factoring company offering more factoring services, such as collecting on your invoices and sending out your bills, can take care of some time-consuming administrative tasks and leave you to focus on growing your business and expanding your client base.
Interstate Capital has the knowledge to take your staffing business to the next level
Since its founding in 1993, Interstate Capital has gained years of experience in offering proven cash flow solutions to people in the staffing industry. Reduce your costs and stress levels by contacting the friendly professionals at Interstate Capital today to find out how they can help you grow your business. If you contact them for a free factoring rate quote right now and submit your application right away, you could be noticing a change in the way you run your business sooner than you think.