From traveling nurses to security guards and oilfield maintenance workers, invoice factoring is helping new staffing agencies get their businesses up and running. The staffing agency industry, specialized sectors as well as general temporary and temp-to-long-term hiring agencies, has seen dramatic growth in the past 5 years. With economic growth moving at a slow pace and uncertainty in the air, many companies are turning to staffing agencies for try-before-you-buy hiring options.
Payroll Factoring Becoming a Go-To Option for Staffing Startups
During this time of growth, staffing agencies need to find a way to fund their startups, and some are turning to staffing factoring, also called payroll factoring, as a fast, reliable financing option. Obtaining a loan from a traditional bank can take several weeks and many are reluctant to lend to startups or businesses with less than one year of experience. Payroll funding, on the other hand, will work with startups because an invoice factoring company will look at the startup’s business plan, potential for growth, and contracted customers whereas a bank generally will rely heavily on credit scores.
Payroll Financing Enabled Growth for These Three Small Businesses
- BusinessFactors.com recently provided $350K in payroll funding to a New York City security guard company that was offered a huge city contract. It was an excellent opportunity, but the company needed to secure additional funding to make sure it could cover the costs associated with the bulk-hiring contract. BusinessFactors.com provided the security guard company with the payroll financing it needed so it could land the contract, hire additional guards and cover payroll.
- In Dallas, Texas, a staffing agency that provides electrical and maintenance workers to the seasonal oil and gas sector needed cash to cover payroll. Long payment cycles are the norm for the industry so payroll funding and cash flow issues are somewhat common. BusinessFactors.com was able to provide a $500K line of credit in time so that payroll financing needs could be met.
- One specialized field that’s seen considerable growth is medical staffing. According to the American Association of Colleges of Nursing, with an already existing nursing shortage, nurse staffing agencies are in high demand. In Seattle, WA, BusinessFactors.com provided a travel nurse staffing company with $100K line of credit so that it could hire nurses to keep up with demand. As a result of this staffing financing, 11 new nurses are back at work caring for patients in busy hospitals.
Staffing Financing Companies Consider Business Potential, Not Just Paperwork
Payroll funding companies are customer service oriented so they will take the time to look at your company’s unique situation to determine financing. They are willing to invest in your company’s future success even if you are new and are lacking a history of credit.