Staffing blog

Ways to Compare Staffing Factoring Companies

By 08.25.21November 29th, 2021No Comments

The staffing and recruiting industry is giant, with reported US revenues of $151.8 billion in 2019. 2020 saw a 21% decline due to the disruptions of the pandemic, but as the economy rebounds, staffing is set to become one of the fastest-growing industries in B2B services. Staffing is a capital intense industry requiring regular access to working capital to cover payroll obligations. Is your staffing agency prepared for growth with a payroll funding solution in place?

As commercial banks continue to restrict credit to SMBs an alternative to traditional debt financing is needed to support staffing agencies. Staffing factoring (Invoice factoring) has become a mainstream funding solution to provide the working capital needs of this burgeoning industry. Easy to qualify for and simple to manage, staffing factoring is an ideal funding solution to meet the financial obligations of staffing agencies.

Why should staffing agencies use staffing factoring?

Factoring is the sale of invoices at a slight discount to a third party (the factor or factoring company) in exchange for immediate cash. This form of invoice financing eliminates the need to wait 30, 60, or 90+ days for your customers to pay account receivables and unlocks money you have already earned. Staffing factoring puts the funds directly into your account to use right away to pay bills and meet payroll obligations.

How to compare staffing factoring companies

Learning to compare staffing factoring companies to choose the best financial partner for your agency is perhaps the most challenging part of managing a factoring arrangement. It is essential to choose a factoring company that genuinely understands the staffing industry, provides dedicated customer service and most importantly, provides easy access to working capital. Most invoice factoring companies claim to support most industries – few have hands-on staffing industry experience. Following is a checklist of recommended criteria to compare when investigating staffing factoring companies.

Experience

  • How many years has the staffing factoring company been in business? Invoice factoring companies with decades of history are well established with mature operational systems and strong financial resources to ensure hassle free payroll funding.
  • Does the factoring company in fact understand the staffing industry – not just from a lender’s perspective, but from actual hands-on experience? A lender with past and present experience in staffing is better positioned to provide tailored services, and quick response to urgent working capital needs as they arise.

Reputation

  • Does the staffing factoring company have a record of being adaptive, responsive, and expedient? Do they know the pain points and financial roadblocks that challenge staffing agencies – and do they have experience overcoming these challenges?
  • Check the factoring company’s website for reviews, testimonials, or case studies. Do the comments reflect the qualities you want in a financial partner?
  • Ask the factoring company for references. Speak to their existing customers and ask about their level of satisfaction.

Integrity

  • Are the factoring rates easy to understand and simple to calculate?
  • Do the factoring services come with any hidden fees or surprises?
  • Does the factoring company provide full transparency with online accounting and regular reports?
  • Are there any potential delays in the funding process?

Superior Customer Service

  • Is their customer support service prompt and helpful?
  • Does the factoring company provide a dedicated Accounts Manager to work directly with you to streamline services?
  • Does the factoring company communicate with you and your customers courteously and professionally?

Benefits of invoice factoring for the staffing industry

In addition to providing fast cash, staffing factoring companies are specialists in credit analysis and invoice collection. When you partner with a reputable staffing factoring company, you can concentrate on growing your business while the factoring company improves your collections and decreases your credit risk. Staffing factoring companies offer online systems that allow you to submit invoices, track customer payments in real-time, and verify customer credit information.

It is crucial to find a good fit when looking for a funding partner for your business. Factoring services provide easy and convenient access to working capital, but only if you have chosen a staffing factoring company that works well with your organization and your customers.

Who is the right staffing factoring company for you?

Choosing a financial partner is a critically important decision – look for an invoice factoring company experienced in your industry; they understand your staffing business. eCapital has been in business for over 25 years and specializes in providing the staffing industry with low-cost payroll funding solutions to improve cash flow and provide a dependable payroll solution. A dedicated Accounts Manager ensures you receive superior customer service. You’ll get trusted advice from experienced industry staff to help with credit decisions, expedite funding and answer all queries. Our cost-effective factoring services are convenient to use, simple to understand and easy to manage.

For more information about convenient, cost-effective staffing factoring services to support your staffing agency, visit eCapital.com