Invoice Factoring for Staffing Agencies

If slow cash flow is hurting your staffing company’s ability to move forward with larger clients and initiatives to meet greater goals, invoice factoring for staffing is the solution! Invoice factoring for staffing is easy, and it’s flexible enough to be right for any staffing business! It’s also the only type of funding that grows as your staffing business grows, so you’ll never again have to worry about losing momentum because of uneven cash flow!

Factor Finders‘ top staffing experts will review your application to identify the unique qualities of your business. We will then connect your staffing company with the best staffing factoring company that matches your distinct needs and goals, ensuring you receive the right services, fees, and support to improve your operational efficiency and financial stability.

What is Invoice Factoring?

Invoice factoring is a type of financing that allows staffing agencies to sell their outstanding invoices to a factoring company in exchange for a cash advance. This process provides staffing companies with immediate access to working capital, which can be used to meet payroll, pay overhead expenses, and take on new clients. Invoice factoring is also known as staffing factoring, staffing agency factoring, or payroll factoring. By converting unpaid invoices into instant cash, staffing agencies can bridge cash flow gaps and ensure smooth operations without waiting for clients to pay.

Is Invoice Factoring Right for Your Staffing Business?

Is invoice factoring right for your staffing business? If you answer yes to any of these questions, now is the time to start invoice factoring:

  • Would you prefer to get paid instantly, instead of having to wait 30-60 days for invoice payments?
  • Is most of your working capital held up by outstanding invoices?
  • Is the expense of trying to collect payments on invoices more costly than it’s worth?
  • Has uneven cash flow ever stopped you from being able to take advantage of an opportunity for growth?
  • Are your worries about being able to make payroll clashing with your desire to start a staffing company?
  • Would more working capital enable you to grow your company?
  • Have you been rejected for a bank-loan, because of size, credit, experience, or because your company was going through rapid growth?

How Invoice Factoring Works

  1. Submit Invoices: You submit your outstanding invoices to the factoring company.
  2. Receive Cash Advance: The factoring company purchases the invoices at a discounted rate based on a percentage of the invoice value. This provides you with immediate working capital.
  3. Client Payment: Your clients pay the factoring company directly.
  4. Final Settlement: Once the factoring company receives the payment from your clients, they will release the remaining balance to you, minus their fees.

How Invoice Factoring Works

The invoice factoring process involves the following steps:

  1. A staffing agency sells its outstanding invoices to a factoring company.
  2. The factoring company purchases the invoices at a discounted rate and provides a cash advance to the staffing agency.
  3. The factoring company then collects payment from the staffing agency’s clients according to the original payment terms.
  4. Once the client pays the invoice, the factoring company releases the remaining amount to the staffing agency.

This straightforward process allows staffing agencies to maintain a steady cash flow, ensuring they can meet payroll and other financial obligations without delay.

Invoice Factoring Vs. a Bank-Loan

If you are looking for funding for your staffing company you may have already tried or be thinking about trying a bank-loan. However, invoice factoring has many advantages over a bank-loan. Bank-loan applications are bulky and come with many complicated procedures, while factoring applications are easy and take only moments. Banks can reject your staffing company for a variety of reasons, but staffing companies of all kinds can get approved for invoice factoring. Bank-loans force you to take on debt and risk, while factoring is debt- and risk-free. Invoice-factoring doesn’t require re-application every time you want additional funds, while bank-loans do. Invoice factoring is highly personalized, while bank-loans just come with red tape and bureaucracy.

Different staffing factoring companies may have varying qualifications and requirements, so it’s essential to check with each provider. Invoice factoring for staffing is the best funding option for your company.

Qualifications and Requirements

To qualify for invoice factoring, staffing agencies typically need to meet the following requirements:

  • Sell to other businesses (B2B)
  • Have creditworthy customers
  • Have a managed tax balance with the IRS and/or CRA
  • Have a minimum monthly volume of invoices to factor

However, qualifications may vary across different factoring companies, so it’s essential to check with each provider. By meeting these basic criteria, staffing agencies can unlock the benefits of invoice factoring and improve their financial stability.

better cash flow with factoring

Choosing a Factoring Company

When selecting a factoring company, staffing agencies should consider the following factors:

  • Experience with staffing companies and agencies
  • Quick and easy setup
  • Competitive rates and flexible terms
  • Industry-specific expertise
  • Recourse vs. non-recourse factoring
  • Notification factoring
  • Whole ledger, partial, or spot factoring
  • Minimum volume requirements

It’s crucial to research and compare different factoring companies to find the best fit for your staffing agency’s needs. A factoring company with a deep understanding of the staffing industry can provide tailored solutions that align with your business goals.

Costs and Terms

The costs and terms of invoice factoring vary across different providers. However, here are some general factors to consider:

  • Factoring rates: typically range between 1%-5%
  • Advance rates: usually between 75% and 95%
  • Discount rates: may vary depending on the factoring company and the creditworthiness of the client
  • Fees: may include origination fees, transfer fees, invoice upload fees, and lockbox fees
  • Terms: may include minimum monthly volume requirements, contract lengths, and termination fees

It’s essential to carefully review the costs and terms of each factoring company to ensure you understand the agreement and can make informed decisions for your staffing agency. By doing so, you can select a factoring partner that offers the best value and supports your financial needs.

Invoice Factoring is Easy!

Invoice factoring is easy to apply for, easy to receive, and the factoring process itself is also simple!

  1. Sell your invoices to the factoring company
  2. Receive up to 90% cash back immediately
  3. The factor collects invoice payments from your clients, subtracts a small fee, and returns the remainder to you
  4. You can repeat as often as necessary

Your Company can Reap all the Benefits of Invoice Factoring for Staffing!

The many benefits your staffing company can take advantage of from invoice factoring include:

  • Doesn’t create any debt
  • Bad credit is OK (this is because factors care more about your clients’ credit)
  • Best rates in the industry: 0.69% to 1.59% for 30 days
  • First time accounts can be funded within days
  • No hidden fees
  • Flexible contracts
  • Risk-free
  • No minimums or maximums
  • Up to 90% immediate cash back

All Staffing Industries can Receive Instant Funding from Invoice Factoring

Staffing companies in all industries can improve their payroll with factoring, including:

Start Factoring your Invoices Now!

To move your business ahead with invoice factoring for staffing, call 1-855-EZ-Factor now or apply online, and watch your company blossom into greater and greater success!

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