There are many challenges your staffing business will face during growth, but the biggest challenge by far is to manage payroll.
When your staffing business grows, you are sending our more and more employees without any immediate payment. This means that your business will be waiting on multiple contracts to be completed before even seeing a dollar for as long as 15, 30, or even 60 days.The employees that you send out are expecting bi-weekly or monthly payment for their work, but because you won’t see cash for another few weeks, you may struggle to manage payroll.
Is there a solution to this?
The answer is yes. There are many forms of alternative financing that are targeted to help businesses like yours.
One of the most popular forms of alternative financing is staffing funding, or sometimes referred to as staffing factoring. Staffing funding is designed to help staffing businesses, like ours, secure a strong source of capital to ensure that your employees are always paid on time. It is also designed to help you avoid obstacles, such as:
- Limited Cash Flow
- High Payroll Financing Expenses
- Ongoing costs of recruitment, sourcing, and hiring
- Unpredictability, and more.
How Staffing Funding Works
Unlike obtaining a loan from a bank’s, staffing funding gives you the money that’s already owned to your business, without incurring any additional debt towards your business.
How is this accomplished?
Staffing funding is performed in three simple steps.
Step 1: Sell your outstanding invoices to a factoring company
Step 2: Get approved in just a day, with a fast application process
Step 3: The factoring company advances up to 96% on the invoice with low rates
Because the factoring company has purchased your invoices or receivables, they take on the collections process to get your invoices paid for you. This eliminates numerous hours of work on your end, so that you can focus on growing your business.
Benefits of Staffing Funding
There are many benefits that come with staffing funding. One of the benefits that stands out to business owners is the fact that you are not taking any more debt to your name.
Factoring for staffing companies allows you to get the money that is already owed to your business. This means that you will not have to deal with the burdens of financing through a bank, including
- Lengthy application process
- Upfront fees
- Waiting up to 30, 60, or even 90 days to receive payments
- Taking on additional debt, and more
Ease of Collections
Another benefit of staffing factoring is the ease of collections. When you sell your invoices to the factoring company, they take on the task of collecting payments, saving you hours of work. Although a staffing factoring company is not a collections service, they take on this task as a way to get cash for your invoices – fast.
Elimination of Debt
You can also expect the elimination of additional debt to your business. Staffing factoring offers credit insurance, where the factoring company typically takes on 100% of the risk in the event that your client does not complete payment on their invoice.
As you can see, factoring is a great way for your staffing business to sustain payroll after growth. With staffing factoring, you will be able to secure a strong source of capital to ensure that your business can grow larger than ever before, while keeping your employees happy.
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