3 Fantastic Reasons Staffing Agencies Should Use Factoring
Staffing agencies perform a vital service by connecting businesses with qualified job seekers who can help them grow their companies. If you’re in charge of an agency, you know that your clients don’t always pay their invoices on time. This can make it tough for you to maintain a positive cash flow and cover your regular operating expenses. You need to find a way to make ends meet during those lean times and accounts receivable financing, otherwise known as factoring, is a great option. Here’s how it can help your staffing agency grow and improve.
1. You Get Access to Money Quickly
When you send your clients an invoice, you’re stuck waiting on them to pay you before you can access the money you need to cover your expenses. When you make use of accounts receivable financing, you’re able to essentially sell the invoice to someone who will collect what’s due from your clients directly. The benefit is that you gain access to that money even if it takes your clients another two weeks to pay.
2. It Saves You Stress and Frustration
If you’ve ever applied for a traditional business loan, you know just how much paperwork is required before you can even find out if you’re approved. The application process seemingly takes forever and it can be months before you get the money you need. This, in turn, creates stress that can make it hard for you to focus on growing your business. Since you get your money quickly with accounts receivable financing and won’t have to worry about filling out countless forms, you’ll spare yourself the frustration and disruptive stress every day.
3. You Won’t Take On Debt
Accounts receivable financing essentially means selling your outstanding invoices in exchange for money you need immediately. It’s not a loan. You’re effectively selling a product to a buyer. This means you won’t end up taking out more debt with each transaction. Instead, you can use the money to help cover your existing debts!
Remember, the more debt your business takes on, the more money you’ll pay in interest every year. This can take a huge toll on your company’s budget and profits and the more debt you have the easier it is to fall behind. Many business owners are then forced to take out yet another loan to help cover their expenses. The last thing any business owner wants to deal with is getting into a never-ending debt cycle.
Factoring is a wonderful way to help your staffing agency grown and thrive without having to take on additional debt while giving you immediate access to the money you need.