If you run a temp agency, we’re certain that you’re aware of all of the headaches that can come with it. At the same time, there is so much joy in helping people try to find jobs while fueling the economy in a super efficient fashion. That being said, sometimes your noble intentions can be slowed or even halted by the one thing that causes issues on so many fronts: cash flow. When you’re a temp agency that needs help with cash flow, your best option is to look for invoice factoring opportunities or small business loans
What is Invoice Factoring Good For?
Generally speaking, companies that bill their clients on the regular will find that invoice factoring is extremely beneficial to control the inflow of their cash. This renders it a perfect strategy for many temp staffing agencies. Since most temp agencies won’t get paid until their clients fill the job vacancies they often get short on cash. However, their payroll, supplies, advertising, and rent don’t take when they get paid into account when the bills arrive on the front doorstep.
The Downside of a Small Business Loan
Because of the persistence of commercial charges, small business loans can often be ineffective for small businesses. Generally, rent can really be put off and if you stop funding advertising you won’t be getting the positions filled that you need in order to earn money and continue operations. This often means that the best small business loan for them isn’t a loan at all, it’s the invoice factoring instead. Oftentimes, small business loans require excellent credit and a larger application window to qualify for them and take advantage of the funds that they provide. To avoid worrying about the approval for a small business loan, look to the approval process for invoice factoring. The approval for that is often based off of the credit of your clients because they’ll be the ones who are responsible for paying.
How Invoice Factoring Works
With invoice factoring, you can generate cash quickly so that you can pay your temp agency’s bills. In general, you can secure up to 90% of your invoices in as long as seven days, but as short as two days. The delay that could take longer to get you the cash is simply the period to build up a relationship with your commercial lending solutions company. After the first times, you can often access that money in around 24 hours.
Industries where invoice factoring might be better than even the best small business loan include areas like accounting, educational, janitorial, industrial, hospitality, and any other business that experiences lag in getting paid for services that have already been completed or that rely on the client saying when a service is finished.
Patriot Commercial Lending Solutions is dedicated to fueling the local Dallas economy through the means of lending out the best small business loans, commercial financing options, and invoice factoring. If you think that invoice factoring would be a better option for your business, contact us. We’re always prepared to help businesses expand and stay afloat so that they can achieve their dreams and help create a community that we all want to be a part of.