With payroll factoring, staffing agencies sell their accounts receivable invoices for a fee to obtain immediate cash. Your clients then pay the factor directly.
Still not convinced? Here are the top five reasons you should consider payroll factoring.
1. Payroll factoring provides your staffing firm with instant cash to operate and grow your business, which is critical in an industry in which you often need to pay employees and vendors weekly, while waiting 30, 60 or even 90 days for client payment.
2. Payroll factoring is available to staffing firms of all sizes and in all stages. It is particularly effective for those looking to start a staffing agency and who have no collateral or credit history.
3. Payroll factors have a much quicker and easier application process than traditional lenders. Your payroll factoring application can be approved within 24 hours for next-day funding. While factors do conduct a credit check, traditional lenders often require good credit and only provide funding after a lengthy business and financial review.
4. Payroll factors that specialize in staffing firms better understand how your business operates and what makes it unique. They are more lenient than traditional lenders and willing to make exceptions for circumstances such as overadvances or unforeseen cash flow needs.
5. Payroll factoring is available for firms in any industry, including:
- Health care
- Information technology
- Light industrial