Financing Your Staffing Agency

Financing Your Staffing Agency
As a​ staffing agency owner, your biggest concern is​ making sure your employees get paid on time - always .​
In this article, we’ll discuss a​ tool that will help you get the funds to​ meet payroll every time .​
We’ll also talk about a​ financing tool that will let you take on new contracts, even those that you think are too big and can’t possibly afford to​ win .​
This financing tool is​ easy to​ qualify for (it’s NOT a​ business loan), can be set up in​ days and can give you all the necessary funding your staffing agency needs.
This tool is​ called invoice factoring, and also referred to​ as​ receivable factoring .​
This financing is​ not offered by a​ bank, but rather by a​ factoring company.
If you are like most agency owners, your problem is​ not lack of​ work or​ customers .​
I​ am sure you have plenty of​ both .​
Your biggest problem is​ that your customers take between 30 and 60 days to​ pay their invoices .​
But, your employees need to​ be paid weekly (or bi-weekly) .​
And unless you have a​ fat bank account, the math does not work .​
Sooner or​ later, you’ll run out of​ money.
But what if​ you could eliminate slow paying clients? No, I​ don’t mean that you should stop doing business with them .​
I​ mean, what if​ you could turn them into quick paying clients? What would happen to​ your business if​ every client was guaranteed (yes, guaranteed!) to​ pay you in​ 2 business days? How many of​ those clients could you take?
Let me have a​ guess .​
You could take as​ many of​ those clients as​ you could get your hands on.
By factoring your staffing agency receivables, you can turn your slow paying invoices into quick paying invoices .​
The process is​ simple:
1 .​
You do your work, as​ usual .​
You bill your customer but then submit a​ copy of​ the invoice to​ the factoring company for financing
2 .​
The factoring company provides you an​ immediate advance on 90% of​ the invoice .​
You can use that money to​ meet payroll and pay expenses
3 .​
The factoring company waits to​ get paid by your customer
4 .​
Once they are paid, they rebate the remaining 10%, less their fees
The main requirement for factoring is​ that you do business with good paying customers .​
If your customers pay regularly (but slowly) you can almost always qualify .​
And as​ opposed to​ a​ business loan, your personal credit is​ usually not an​ issue.
So, if​ you own a​ growing staffing company, be sure to​ consider invoice factoring.

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