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Need Unlimited Payroll Funding for your Information Technology Company?
Perhaps more so than any other businesses, IT staffing firms can reap huge rewards from factoring their receivables. Why is this?
It is a rarity to find an IT Firm that has been in business more than five years. 9/11 taught owners of those firms what it's like to be in an industry that has imploded. All but the best-capitalized IT staffing firms shut their doors shortly after 9/11 as technology spending dwindled to unprecedented lows. 9/11 is the major reason the staffing industry lacks firms having a long enough track record to qualify for loans from traditional lenders. Find out more about Factoring Companies Funding the Staffing Industry
Financing IT Staffing Receivables is more popular today
Unlike the high-profile travel industry, which gained national news coverage as it went into a post-9/11 tail spin, the IT staffing industry suffered in silence. Highly fragmented, typically under-capitalized, and comprised largely of young upstarts, the IT Staffing Industry had few players with the capital resources to withstand a dramatic, long-term downturn in their industry. What's more, because most IT Staffing firms lack the type of tangible assets that traditional lenders like to loan against, those that would otherwise qualify for loans from traditional lending sources, rarely could borrow as much as they needed to support their working capital needs Request a Quote Today!
Find out how IT Staffing Start-ups get their financing
Three or four years post-9/11, firms began expanding tech spending and the IT staffing industry was reborn. But with so many start-ups and the few older ones seeking to expand their businesses, where would the capital come from to take advantage of this tremendous growth opportunity. Banks? Not.
To fuel the growth of their firms, post 9/11 IT staffing firms have increasingly turned to factoring as the preferred financing resource. The one thing that most IT staffing firms have in common is good margins. It is not uncommon to see 30%+ gross profit margins in IT Staffing, so giving up 1.59% to 3.5% off the top of an invoice in exchange for obtaining immediate payment from a factoring company makes a lot of sense to growing IT Staffing firms.
Factoring companies that specialize in IT Staffing
Factoring companies that specialize in IT Staffing, Temporary Staffing, and Medical Staffing provide other value-added services—for no additional fee. For example, the best factoring companies employ a department of professional collection specialists who will assist you in keeping delinquent payments to a minimum. These collection specialists can work independently of or in tandem with your own administrative staff. In many cases, IT staffing firms will totally outsource to their factoring company all collection work, freeing up other individuals for more productive activities. Factoring companies will also help the IT staffing firm to establish prudent and realistic credit limits for the staffing firm's customers. Good factoring companies provide their clients with the ability to request and manage their credit limits on line and will also provide their IT staffing clients access to all their bookkeeping reports in real time on line on the factoring company's web site.
Other factoring companies that have a staffing specialty also provide back office support such as software, payroll, and invoicing (billing service) for an additional fee. These services, when combined with the funding service, are described as “full service factoring”.
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