Of all the funding opportunities that staffing agencies look out for, Payroll factoring or payroll funding has come into vogue in the recent past and has helped many staffing agencies in the US and all over the world.
Staffing agencies have to face a number of challenges and funding is one of them when the invoices remain unpaid for a considerable period of time. Even when your invoices are unpaid, your fixed costs remain the same. You have to pay your bills and pay your employees. This is where payroll factoring comes into play. So what exactly is payroll factoring or payroll funding?
What is Payroll Factoring?
According to Porter Capital, a leading Capital solutions company which helps staffing agencies meet their working capital requirements among others through Invoice factoring and line of credit, Payroll Factoring allows access to capital even when your invoices are unpaid. So, if you are in need of immediate capital, Payroll factoring can help you a lot.
When can Payroll Factoring help businesses?
When your business does not qualify for traditional loans
Running a business can be a bit challenging sometimes. Especially when you are not able to meet your capital needs. Because of a plethora of reasons, you might be termed as one of those entities not eligible for loans. In such situations, payroll factoring can be a life saver.
When you need to improve cash flow
Cash flow is what keeps your business running. When you think of improving your business’ cash flow, you can take help of companies that can help you turn your pending invoices into capital so that the overall cash flow of your company improves.
When you need immediate access to capital
While running your staffing agency, in case of unforeseen situations, you might find yourself in need of immediate cash. Payroll factoring can save your life if you have a decent lending and factoring company. For example, Porter Capital allows quick access to capital as they have a faster approval process.
When you wish rapid growth for your business
Even when your business is not in trouble, you might need capital if you are looking for rapid expansion of your business. You might be lucky to find good investors. However, as a staffing agency, pending invoices can help you get access to capital faster than you ever imagined.
Conclusion
For staffing agencies, Payroll factoring has become a great tool to meet their capital needs. However, they need to be aware of the various clauses specified in the agreement with a lending and factoring company. Also, they need to ensure that they get competitive rates and the company they are getting in agreement with is a trusted company.
