Many early stage temporary staffing companies frequently use a factoring company to grow their business. Funding time sheet invoices alleviates the stress created from lack of cash flow as bigger contracts are signed and more staff is placed. There are many benefits when factoring those invoices, like there is no top limit to how much can be financed. So unlike a bank line of credit which has a credit limit, invoice financing can grow with the company. It’s a very suitable way to get through a growth period. Typically, well run staffing firms have excellent profit margins so the nominal financing charges are never a problem.
Another benefit is the decision to finance an invoice is based on the credit of the customer, not the staffing company. As long as the customer who owes payment of the invoice is a good strong company, it will be eligible for factoring.
Because the entire process is so simple to use, easy to set up, and allows for ready access to capital, accounts receivable factoring is a trusted tool of the temporary staffing industry.