Staffing companies are continuing to enjoy growing demand for their services. The staffing industry suffered an 11% decline in overall revenue in 2020 as the entire economy shrunk. 2021 saw a 16% increase in revenue followed by a 4% increase for 2022. Industry experts predict continued growth for staffing companies in 2023.
The forecast of expanding sales can be a two edged sword for owners of staffing companies. The opportunity for adding new customers and expanding existing contracts is always welcome. For many business owners the challenge will be finding the working capital for their growing payroll. This growing payroll is often accompanied with larger customers that take significantly longer to pay their invoices. This combination of a growing payroll and slower paying customers can be the undoing for a staffing company if the owner does not respond quickly.
Invoice factoring is a fast solution to this negative cash flow problem. By partnering with American Receivable, the business owner now has the steady, consistent cash flow they need to grow their business. Invoice factoring is the simple transaction of selling your open account receivable to your factoring company for cash. This gives the staffing company owner the working capital they need to for payroll and operating expenses while the factoring company waits for invoice to be paid.
The Factoring Advantage
There are several reasons that invoice factoring is such a great form of financing for staffing companies
- Factoring companies fund quickly. Independently owned factoring companies do not have layers of committees and regulators that make their decisions. Factoring companies understand the importance of quickly funding prospects, often in 48 hours or less.
- Factoring companies focus on the credit strength of your customers, not on yours. Many business owners will use their personal credit to finance their business and damage their personal credit score. This does not deter the factoring company since it is your customer that is going to pay them back.
- Get cash when you need it. The factoring company will purchase your invoices as soon as you issue it to your customer. Since staffing companies will pay their employees one to two weeks in arrears this leaves plenty of time to get funded by your factoring company and stay cash flow positive.
- Factoring companies protect your credit risk. Factoring companies are set up to carefully vet your new customers and monitor your existing accounts to guard you from delayed payments or worse.
Celebrating our 44th anniversary, American Receivable remains committed to providing fast and reliable factoring to the entire staffing industry. Our streamlined application allows our prospects to get funded quickly. We are committed to providing the working capital to our staffing clients, so they never have to turn down an opportunity. Call us today to find out how we can help put your company to the fast track to success!
Jack Stieber [email protected] 972-404-4726
Brad Gurney [email protected] 800-297-6652
Dakota Stieber [email protected] 512-339-5112
