When a staffing company needs funds to grow their business, they typically turn to a bank for a loan. However, not all staffing companies are able to secure a loan from a bank due to their credit history or length of time in business. This is where accounts receivable funding, also known as factoring, comes into play.
Accounts receivable funding is a financial service that allows a staffing company to receive immediate cash by selling its outstanding invoices to a factoring company. The factor then collects the outstanding invoices on behalf of the staffing company, taking a small percentage as a fee.
The benefit of accounts receivable funding is that it provides immediate cash flow, which can be critical for staffing companies that need to cover payroll or invest in growth opportunities. Unlike a bank loan, accounts receivable funding is not based on the creditworthiness of the staffing company, but rather on the creditworthiness of their clients. Because of this the factoring company can quickly approve your clients and advance larger sums than a bank typically would.
The factoring company is primarily interested in the creditworthiness of the clients of the staffing company, not the staffing company itself. This means that staffing companies with poor credit history or other factors that make them unattractive to banks may still be able to access funding through accounts receivable funding.
Another advantage of accounts receivable funding is that it is relatively easy and quick to set up. Unlike a bank loan, which can take weeks or months to process, accounts receivable funding can often be set up within days. This can be especially important for staffing companies that need to access funds quickly in order to take advantage of time-sensitive growth opportunities.
Overall, accounts receivable funding can be a valuable tool for staffing companies that have been turned down for a bank loan. It provides immediate cash flow, is based on the creditworthiness of the staffing company’s clients and can be set up quickly.
Staffing companies have turned to American Receivable for 44 years for Top Rated Factoring Service. Our Streamlined Application is FREE, and allows our clients to be funded in just a few days. Call today to get your company started today.
Jack Stieber jack@amreicanreceivable.com 972-404-4726
Brad Gurney brad@americanreceivable.com 800-297-6652
Dakota Stieber dakota@americanreceivable.com 512-339-5112
