Could Your Staffing Agency Benefit from Payroll Funding?
Written by US Funding on October 22, 2015
When you run a staffing company, the formula for success is pretty straightforward: businesses come to you seeking workers, you bring people in who could be a good fit, and if they are, you send them out to the various jobs. At the core, it is a relatively simple process. However, you know that there is a lot more that goes on. Nothing is ever as easy as it might appear, and generally things are much more involved.
Take your payroll, for example. In order to pay your employees, you need to get payment from your clients. Again, this is something that seems clear-cut. However, while you pay your workers on a weekly or bi-weekly basis, the clients might not pay you for a month or even longer. Therefore, there is a real possibility that the money will run out, as you may have experienced a time or two. A very good solution to this is payroll funding.
When a business is in need of money, the first inclination might be to contact a bank or other lending institution. While a loan may be a good option, payroll funding could be a better one for a number of reasons. First of all, it is not always easy to get a loan. Even if your staffing agency is doing really well, frequently banks are reluctant to approve loans. Credit usually plays a big role with loans.
If your business does not have great credit or has yet to establish a long credit history, this will be held against you. With payroll funding, credit is not a factor Good credit, bad credit, no credit; it just does not matter. Secondly, a loan can take a while to get. The process can be grueling and even if you are finally able to get one, you still may have to wait a while to obtain your money.
Payroll funding gives you cash almost right away. Because you are selling your accounts receivable, it is pretty much like any other business transaction. There is very little waiting involved. Finally, with a loan, of course there is the matter of paying it back. If the interest rate is not very favorable, you could end up paying back a lot more than you borrowed. This could further hurt your business. The best part about payroll funding is that there is no money to pay back.
As mentioned, you are selling something in exchange for money. The money is yours to use as you deem necessary. You will never have to worry about somebody breathing down your neck looking for it. Another thing that you avoid is adding debt to your balance sheet. Since the funding is not a loan, you have not taken on any debt, which leaves your balance sheet in a better position when reviewed by auditors or board members.
If you are in a situation – or anticipate being in one – where you do not have enough money on hand to pay your employees, get in touch with US Funding. We can help you get the money you need in a very short amount of time so you can keep your workers happy and your business running.