Invoice factoring is quickly becoming the preferred method of funding for staffing agencies around the world. If your clients pay on 15, 30 or even 60 day terms, factoring is the perfect solution. Staffing factoring allows business owners to sell their outstanding invoices for immediate cash. Once you choose a factoring company, they advance you up to 90 percent of the original invoice amount. The factoring company becomes responsible for collecting payment from your customers and once they pay, the remaining invoice amount is returned to you, minus a small factoring fee.
Factoring is not a one-size-fits-all type of financing. When factoring, staffing agencies receive a plan tailored to their business’s needs. Whether your staffing agency has 10 or 10,000 employees, factoring companies will work with you to find the perfect cash flow solution.
Some of the cash flow problems that staffing agencies solve with factoring include:
- The need for hiring new employees
- Increase marketing efforts
- Making payroll
- Extend payment terms to clients
- Purchasing new supplies and equipment
There are many benefits of invoice factoring to staffing agencies. Business owners use factoring to streamline operations and grow their businesses.
Advantages of Invoice Financing
No more waiting for payments from customers
Do your customers take up to 60 days to make a payment? Avoid this headache with invoice factoring. If you sell your unpaid invoices to a factoring company, you get paid immediately.
Startups with no credit history
Factoring looks at the credit of your customers, since they owe the payment. It doesn’t matter if you’re a startup staffing company with no credit or if you own a business that has faced past credit problems. As long as your clients are trustworthy and have a good credit score, you’ll most likely be approved to finance your invoices.
Factoring helps eliminate bad debt
Factoring does not create debt. Staffing agencies can even use the extra money from factoring to pay down existing debt.
Avoid the collections process
Factoring eliminates the collection process for business owners. The factoring company will handle all collections from your customers.
No long-term contracts or minimums
If you choose to factor invoices, there will be no long-term contracts involved. You can stop factoring whenever you choose. There are also no minimum amounts required to factor. This allows you to finance as many or as few invoices as you prefer.
Factoring is the perfect cash flow solution for businesses facing seasonal patterns. If your staffing agency is busier during the summer months, factoring allows you to strengthen your cash flow, so when business slows down you’re stable.
Factoring companies provide funding services for staffing companies of all sizes and stages. Whether you’re a startup or have been in business for decades, there is an invoice factoring solution for you. Also, the factoring process is quick and easy. The application process is painless and funding can be received in as little as 24 hours. Fast Payroll Funding can get your staffing agency the financing needed with 24 hours to solve your working capital problems. Contact us today for a free quote.