Factoring for Staffing Companies – What to Look For
Expediting cash flow is just one benefit of factoring for staffing companies. When determining which factoring companies are the best for staffing agencies, look for low fees and high advances, low reserves (or holdbacks), fast financing, transparency, and dedicated account managers who understand the importance of staffing company financing for faster cash flow and staffing payroll loans. Ask questions like:
- How much will the factoring advance be?
- What will my factoring fee be?
- How fast can I speed up working capital?
- How long will I wait for funding after approval?
- What criteria does the factoring company use to determine factoring fees and advances?
- Are there any other fees – besides the factoring fee – that I will have to pay?
- What other services does the factoring company provide to add value?
Choosing a Factoring Company for Staffing Agency Financing
There are dozens of factoring companies that offer invoice factoring for staffing companies. Since the main reason staffing agencies factor invoices is to speed up cash flow, the three most important things they want to know are:
1. How much money they can unlock by factoring staffing agency invoices
2. What it will cost
3. How fast they can access working capital unlocked by factoring
However important these three components are, they are not the only things a staffing agency should consider when evaluating staffing agency factoring companies. For instance, if a factoring company imposes administrative and notification fees when processing invoices, it can drive up the real cost of invoice factoring. Likewise, if funding takes a long time, the staffing company may not benefit as much as they would like – or need – by factoring invoices.
When evaluating which factoring companies are the best for staffing agencies, find out:
4. How fast funds are transferred once an invoice has been approved for factoring
5. What criteria the factoring company uses to determine credit worthiness of a customer or invoice
6. What fees you will have to pay besides the factoring fee (application, due diligence, notification, processing, and other fees which are sometimes hidden in factoring contract details)
7. What else the factoring company provides, such as:
- Free credit checks to help you vet your customers
- dedicated account managers
- online account access and invoice submitting
- expertise to help you maximize the benefits of staffing company financing
What Staffing Agency Factoring Companies Do
Staffing agency factoring companies provide a financing tool called invoice factoring. To access financing, staffing agencies sell unpaid customer receivables to a factoring company for a small fee, called a factoring fee.
The factoring company advances as much as 90% of the invoice amount to the staffing agency, and sometimes even more. When the customer has paid the invoice, any amount held in reserve is also returned to the staffing agency.
As capital finance specialists, we have provided factoring for staffing companies for nearly 50 years. We put our experience to work every day to help staffing agencies and temporary employers of all kinds speed up cash flow so they can grow more quickly, including:
- staffing and recruiting companies
- IT staffing agencies
- nurse staffing and medical staffing agencies
- temporary employment agencies
- security guard staffing companies
- and more, just ask us!
We understand that staffing companies expend thousands of dollars to recruit, interview, test, and place employees, and then wait 30, 60 or even 90 days to realize reimbursement for those expenses. Instead of waiting on client payments, staffing companies can speed up cash flow by factoring invoices to better align expenses with corresponding revenue.
You can factor – or sell – an unpaid customer invoice to us as soon as the same day it is generated. You’ll get answers from us in 1 business day (or even faster) and funding will be processed on the same or next business day from approval.
Your advance could be as high as 90% of the amount of the invoice factored (or potentially even more) depending on the credit worthiness of your customer, the amount of the invoice, how long you have factored with us, how much you factor with us, and so on.
We will work with you to tailor a staffing company financing solution that speeds up cash flow and reflects the preferences of your business:
- Unlock up to 90% of the amount of an unpaid customer invoice
- A low factoring fee, based on the credit worthiness of your customer, etc., will be your all-in cost of financing – with no hidden or application fees.
- We process submitted invoices within 24 hours so you’ll get fast answers and stay in the know.
- We offer same-day funding (during business hours and excluding national holidays, when wire services are not available).
- Whether we factor an invoice, the amount advanced, the factoring fee, and any amount held as a reserve largely depends on the credit worthiness of your customer.
- We don’t have hidden fees! You won’t pay application, due diligence, notification, processing, and other fees. Unless a wire fee applies, the factoring fee will nearly always be the only cost you pay for factoring services.
- With the most important concerns addressed, we try to add value for our customers wherever we can. We know that your repeat business and referrals depend on the customer experience we provide to you and your team. So we also provide:
- Free credit checks to help you vet your customers
- Dedicated account managers
- Online account access and invoice submitting
- Expertise to help you maximize the benefits of staffing company financing
Stop chasing customer payments!
Reach out to us for a free, no-obligation quote for invoice factoring and find out whether it could help your staffing business speed up cash flow. Contact us by phone at 866-472-0167 or apply online – you could go from approval to funding in 1-2 business days – or even faster.