When many business owners face that gap between finishing a job and getting paid for it, it’s hard to pay their bills and plan for the future. When they have to wait 30, 60, or even 90 days for customers to pay them for work that has been completed, their own business expenses still need to be covered. That’s where invoice factoring comes in. It’s a tried-and-true method of bridging that gap without incurring debt or missing a beat in your business operations.
For an example, let’s take a look at a new staffing company that provides temporary office workers to local businesses. After years working for other staffing agencies, the owner of CSB Staffing founded his own company about two years ago.
Carlos was glad to be out on his own and with his strong sales background, he signed on a few large customers right away. However, after a strong start, he had to turn down some of his customers’ requests for workers. He was juggling too much. Basically his office was too short-staffed to hire, process, and supervise the number of temporary employees that his customers needed.
His largest customer, a regional insurance processing center, kept nearly 50 temporary workers busy, but they insisted on paying their invoices in 45 days, long payment terms for a new business to accept. Carlos was barely making his payroll every week and yet he needed to invest in more office staff.
He had gone to his bank, where he had personal accounts for years, but the loan officer rejected his request for a loan based on his lack of credit history. He knew about factoring from a previous job, so he called Interstate Capital, a leader in invoice factoring, to get an advance on some of his outstanding invoices. Interstate signed him up quickly because his customers had good credit – his own lack of financial history wasn’t an issue.
Interstate Capital assigned a helpful account manager to CSB Staffing and the next day Carlos received a direct deposit to his bank account that reflected 90% of what the insurance processing center owed him. With the advance, payroll was no problem that Friday and he was quickly able to hire on two good people for his own office. CSB Staffing has gradually grown into a company that its customers can count on when they need temporary personnel.
Interstate Capital works with hundreds of companies, new and old, in many industries to help them maintain and grow their businesses. If you’re missing out on opportunities and the chance to expand due to a lack of working capital, invoice factoring could be the answer. Contact the friendly staff at Interstate Capital today to get a free factoring assessment today.