According to StaffingTalk.com The nation’s unemployment rate is improving though it remains stubbornly high in a number of sectors and parts of the country. One industry that has seen dramatic growth is temporary staffing because more companies are hiring short-term workers rather than full-time staff.
While dramatic growth is generally considered at good thing for businesses, many startups struggle with keeping up with demand in terms of delivering their services to new clients at a rapid rate. There is also the risk of over-promising and losing a client for not being able to deliver according to contract. Such a failure could stop a start-up business in its first year.
Rapid Growth Often Leads to Factoring Receivables
It actually is very common for a startup business faced with greater-than-expected success or demand to seek invoice factoring services. Such a company probably does not have the cash reserves or long credit history to obtain the money it needs from a traditional bank to fulfill orders or provide service.
Fortunately, an invoice factoring company like Business Factors, Inc., does not see “no credit” the same as “bad credit” in the way banks generally do. Many startups without a history of credit simply haven’t had the opportunity to establish one yet. According to expert predictions from Inc. Magazine, with staffing agencies experiencing a boom in growth, staffing factoring proves to be a great option.
Payroll Funding To Assist Businesses with Personal Liens
In addition to working with startups that have yet to solidify their credit history, account receivables factoring will often times work with businesses where the owners have a personal bankruptcy. Invoice factoring companies view personal and business accounts separately, provided that the business is filed as a corporation such as an LLC.
For instance, our payroll factoring company was able to work with a startup staffing agency in San Diego, CA providing it with a $150K line of credit. The company was turned down by a traditional bank because its owner had personal tax liens unrelated to the corporate entity. The factoring company was able to discern that the LLC was established separately for the sole purpose of the running the agency. In many cases, payroll funding companies can work with the corporation provided it is free of its own liens or encumbrances.
Because of payroll factoring, the startup was able to continue its business operations and meet its clients’ demands. As a result, people sourced by the local staffing agency were able to go to work as temporary employees. Without invoice factoring as an option for this small staffing startup, this business may have not been able to succeed & keep their doors open for future business. Another great success story for the factoring industry.