5 Ways Payroll Agencies Benefit From Factoring
Written by US Funding on January 7, 2016
Circumstances often arise that cause small businesses to need a little extra help with their expenses. Payroll agencies, in particular, are responsible for making sure they have plenty of money when it comes time to cut checks for all of their employees, not to mention having enough to cover all the other various costs of running a business as well. When funding becomes a challenge, invoice factoring can help considerably. US Funding assists companies that decide to utilize this financing option and take advantage of all the benefits it has to offer. The next time your payroll agency requires a quick and easy funding solution, consider the following reasons why factoring may be the best answer.
Get Cash Upfront to Pay Employees and Other Expenses
Being able to pay your employees on time is a sign of how stable and reliable a business you have. Payroll agencies work with many companies at a time and they are likely to be on different payment schedules. This means there must be a steady flow of income at all times to ensure there is money to pay each employee, whenever a company’s payroll is due. If an agency finds itself short on cash, it can simply turn to factoring to get cash fast and pay employees right away. This also allows for some breathing room when other expenses are due too.
Be Relieved of the Burden of Collecting on Invoices
The whole idea behind factoring is for businesses to sell their outstanding invoices, or accounts receivable, in exchange for a cash advance. This is beneficial when you have clients that take anywhere from one to three months to pay their invoices. Factoring makes certain that payroll agencies still have money coming in, but the burden of trying to collect their accounts receivable is taken over by the company handling your factoring service, such as US Funding.
Avoid an Interruption in Agency Growth
It’s exciting to know your agency is ready to expand, but growth actually calls for additional funds. You must have the ability to pay for more staff and increase your marketing efforts if you want to take on new clients. Factoring will take care of these costs, in addition to giving you some leeway to offer new clients appealing payment terms that won’t negatively affect your cash flow.
No Need to Worry About Incurring Debt
One of the biggest advantages of factoring for payroll agencies is that no debt will be incurred when they are advanced the money. Unlike a loan, there is no interest associated with factoring, only a small fee. This also keeps balance sheets nice and clean. Investors and board members will be happy to see no additional loans payable.
Go Through an Easy Application Process
The application process for factoring is much easier than that required for a business loan. Even agencies with little or poor credit are encouraged to apply. Bank loans also take a lot longer to process, often with several hoops to jump through, and at the end there’s still no guarantee you’ll get the money you need.
Factoring offers payroll agencies a flexible option for making it through tough economic times. US Funding will help keep your business on solid financial ground with professional factoring services.