Benefits of Invoice Factoring for Staffing Companies
Temp agencies facing cash flow problems basically have two primary options: invoice factoring or a business loan. In my opinion, the invoice factoring for staffing companies has many benefits and, compared to a business loan, it is often a better solution.
A company that bills its clients usually finds invoice factoring to be a rather effective way to address serious cash flow problems. Since temp agencies don’t get paid until they fill their job vacancies, it can lead to issues regarding cash flow. Only after they have found a suitable worker who has actually done the job, these agencies invoice their clients. They need to wait before they get paid and, meanwhile, they must pay their bills: payroll, supply, advertising, rent etc. So, if expenses can’t be put off, it means a temp agency has to secure money right away.
Here are some benefits of invoice factoring for staffing companies:
- With invoice factoring, there’s no minimum or maximum – the working capital a company can get is unlimited. There is only one type of funding types that increases as your sales do and it’s called invoice factoring.
- Factoring is not a loan, so there’s no debt. This means you can take on additional funding a lot easier than with a loan. Bad credit is OK, so you don’t even have to wonder whether you’ll get that money or not.
- A company gets cash immediately. (probably in less than 24 hours!)
- Factoring companies handle offer their assistance and handling your billing.
- The application process is very easy. A bank loan usually involves a lot of red tape and it takes some time, with the added risk of getting turned down. Contrary to that, applying for invoice factoring is simplified with higher chances of a positive outcome.
- Invoice Factoring is totally flexible service, unlike other funding types. It is designed to meet your company’s specific needs, so you can factor as often as it’s necessary. Also, you are free to choose which invoices should be factored. Once you factor, you can opt-out at any time, since there are no binding contracts.