Staffing Factoring Companies
Factoring For Staffing Companies
Staffing agencies account for roughly 3 million temporary and contract employees in an average week. They are an essential part of the US economy and assist over 16 million people find work in a year. In addition they operate over many different industries including IT, Industrial, Healthcare, and Clerical roles. As a result, many staffing firms have a large payroll expense that can benefit with factoring for staffing companies.
A typical staffing agency has payment terms of net 15 to net 60 days by their customer. However, their temporary and contracted workers receive payment on a weekly or biweekly basis. This will oftentimes cause a serious cash flow crunch for a new or growing staffing company. Fortunately, working with a factor that provides factoring for staffing companies can resolve this situation. By advancing on those outstanding unpaid invoices, a factoring company will provide between 80%-90% of the invoice value within 24-48 hours of verification. In some instances, a factor may even be able to advance 95% of the invoice value.
The Process With Factoring For Staffing Companies
The steps required by a staffing factoring company are fairly similar to that of most other industries. First the client will complete a basic application process, at no cost or commitment. Then, the factor will provide a terms sheet disclosing their rates and terms. The factoring company will then provide the agreement documents along with a request for the invoices to be factored. Once that is all returned, the factor will begin the verification process and the factoring for the staffing company can begin. The initial advances will typically arrive in their account within 24-48 hours.
Payroll Funding or Staffing Factoring?
Payroll funding is another way to describe the process of invoice factoring for staffing companies. The term payroll factoring is interchangeable with the two as well. A company that specializes in factoring for staffing companies will further discuss differences for the options they have available. In some instances of payroll factoring, a factoring company will be able to advance direct against time sheets for contracted employees. Others may wait for the invoice to be generated and will verify once received. A factoring company may specialize in staffing factoring but will typically service other payroll and staff heavy industries, such as distribution and service based small businesses.
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Benefits of Invoice Factoring For Staffing Agencies
Factoring is a readily available solution to your cash flow crunch. Whether you’re waiting 30, 60, or even 90 days to get paid there is a staffing factoring company for you. Check out some of these other benefits from the factoring companies we work with: