1st Commercial Credit

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Over 18 Years in Business

Recent Transactions

invoice factoring for a trucking oil field hauler

$1.2 Million

Oil Field Hauler

invoice factoring for a automotive staffing agency providing to oem detroit, mi

$2 Million

Staffing Automotive Detroit

Accounts Receivable Loans Offer Financial Flexibility for Temporary Staffing Companies

The temporary staffing industry requires a constant supply of cash on hand to manage salaries and meet demand for workers in the local and national marketplace. Seasonal fluctuations and invoicing cycles can sometimes result in cash flow shortages for these companies. These shortfalls can have catastrophic effects on growing businesses and can limit their ability to take on new clients or to expand into new territories. Finding added financial resources can help temporary staffing agencies continue to serve their clients and manage cash flow difficulties more easily.

Accounts Receivable Financing Options

Temporary staffing firms must pay their employees for all hours worked on a regular basis to remain in business. However, outstanding invoices from client companies may not be paid until weeks after the services have been rendered to these customers. Accounts receivable lending arrangements can often help staffing companies to manage various expenses:

  • Salaries and benefits for temporary employees
  • Utilities, office rental and general overhead costs
  • Expansion into new territories
  • Added staff for seasonal demands

Staffing companies can choose factoring arrangements, loans or lines of credit on outstanding invoices to achieve a quick infusion of cash on hand into the business. These added financial resources can provide increased flexibility and stability for temporary staffing firms.

How Accounts Receivable Financing Works

Factoring arrangements for Temporary Staffing Companies differ from loans and lines of credit because they involve the discounted sale of outstanding invoices to a financial institution in return for immediate cash disbursements. Invoice loans and lines of credit, by contrast, use accounts receivable as collateral to secure these financing arrangements. Approvals are generally based on the creditworthiness of the client businesses rather than on the credit history or financials of the staffing company. This alternative approach allows temporary staffing agencies to obtain financing even if they have been turned down by traditional lenders in the past.

Advantages of Invoice Lending

The accounts receivable loan application process generally requires significantly less paperwork than traditional lending arrangements. Loan decisions can be completed in as little as one business day; disbursement of loan proceeds typically can be made within a week of approval. This streamlined approach can put cash in the hands of staffing company owners and administrators more quickly, allowing them to manage salary obligations and ongoing overhead expenses in a timely manner.

Asset-based lenders like 1st Commercial Credit offer fast decisions and rapid disbursements for borrowers. By seeking these alternative funding methods, temporary staffing companies can manage their cash flow situations more effectively and can continue their corporate growth in the fast-paced competitive marketplace.