Long Haul Trucking Company
Staffing Light Industrial
A recent article in Bloomberg BusinessWeek indicates that the temporary staffing industry continues to experience unprecedented growth and expansion due to increased demand throughout the U.S. economy. Entitled "Temporary Jobs Becoming a Permanent Fixture in U.S.," the piece estimates that 17 million employees in the U.S. are temporary hires. This amounts to about 12 percent of all workers in the country. The trend is expected to continue as more businesses opt for flexibility and streamlined personnel processes in the workplace environment. To meet this demand, many temporary staffing firms are taking on new staff members. This can create significant cash flow problems for companies unprepared for these added payroll, benefits and administration expenses.
Demand for Staff Drives Need for Credit
Taking on new staff members and retaining their services to meet ongoing demand can produce a cash crunch in the modern staffing environment. To meet these cash flow requirements, most temporary staffing firms initially seek credit in the traditional banking marketplace. Without the right type of collateral, however, these companies may experience difficulties due to current tight credit conditions throughout the U.S. economy. For cash-strapped staffing firms, asset-based lending arrangements can provide the funding needed to meet increased demand in the commercial and industrial sectors of the modern marketplace.
Asset-Based Lending and Faster Cash
For many temporary staffing companies, asset-based lenders for staffing agencies represent a viable alternative to traditional banking arrangements. These lending institutions accept alternative forms of collateral to secure loans and lines of credit for their customers. Accounts receivable, outstanding invoices and purchase orders from creditworthy customers can be collateralized and used to provide security for asset-based loans from these companies. In the staffing industry, these alternative lending arrangements can provide cash on hand to hire additional staff and take on new contracts. Once the invoices and accounts receivable amounts are paid, the lending company retains the principal amount along with their agreed-upon fees. The balance is returned to the borrower as profit on these transactions.
The added flexibility provided by asset-based lending arrangements allows temp firms to manage their staffing needs more efficiently and to take advantage of opportunities in the competitive marketplace. By financing new hires with loans and lines of credit from 1st Commercial Credit and other asset-based lenders, these companies can maximize their profitability during this period of high demand for their services. This proactive approach to financing can increase the market position of the firm in the temporary staffing industry and can build a solid foundation for growth and expansion well into the future.