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The economy today has opened the door for long-term temporary staffing solutions for many companies. Staffing companies allow struggling companies to hire qualified employees without paying workers comp, payroll taxes or for benefits.
With such a focus on staffing companies, and of their potential growth as the country tries to tackle the unemployment issue, capital is going to be needed for the staffing companies to expand. The problem is that not every staffing company has the available capital to expand in a way that will not only help their business but will in turn help people to find much needed employment. This begs the question, what type of lending do staffing companies typically get.
Staffing companies have the choice of a few different types of lenders. Most staffing companies would qualify for a typical business loan that you will find from a traditional lending institution. Staffing companies can receive a business loan from an established national or regional bank, or they can simply go to individual lending institutions in order to secure a business loan. More information about Factoring Staffing Companies
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For those staffing companies that are looking for a lending institution that is a better fit for their business than what a typical bank might be, then lenders that focus on lending to staffing companies may be the right fit. There are companies that focus their entire lending business to helping facilitate the expansion and growth of staffing companies.
These lenders are especially in tune with the unique challenges that face staffing companies. Staffing company lenders understand the various aspects of the staffing industry and know what areas a company typically has to deal with and what type of loans would best meet the staffing company's financial needs. If you're looking for a specific lender that deals directly with staffing companies, here are a few things that you want to consider.
As with most business loans, staffing companies still require simple lines of credit. You want to look for a staffing lender that is going to be flexible in only offering you a sufficient line of credit for your day-to-day operations. They should also have the flexibility to help you to secure that line of credit -- even if your business credit rating isn't stellar. Often times a staffing lender will lend directly. Make sure that the lender you choose has the resources and the flexibility to get your staffing company the money that's needed for a line of credit.
Another thing you want to look for in a staffing lender is payroll financing. While lines of credit or for additional business loans may be a one and done proposition, payroll financing can be a loan that occurs quite often.
In some cases, a payroll funding loan can be enacted once a week, once every other week or once a month. If your business is expanding and you're not sure if your company is going to be able to cover payroll, whether it's for a short period of time or you believe you will be short on cash for a long while, you want to look for a lender that offers this valuable financing option.
Another type of lender that staffing companies want to deal with are companies that offer factoring. Factoring is the process by which your company gets immediate funding through the selling of your accounts receivables.
Most businesses have account receivables, and in some cases, a business can wait anywhere from 30 days to 120 days before they receive payments for those receivables. This can cause enormous financial strain to the staffing company.
Factoring allows for a lending institution to purchase your accounts receivables for a fee, usually a percentage of the amount of the receivables. You receive the cash immediately and the lending institution assumes the debt and pursues payment for those receivables.
The great thing about these various lending options is the staffing company has the choice to seek out individual lenders for each of these issues or they can choose a lending institution that offers all the services under one umbrella on an as needed basis. Which option you choose will largely depend on your needs, the competitive nature of a lenders fees and interest and the comfort level you have with the lending institutions you are considering working with.
Lastly, as it relates to the type of lender's staffing company should use, the decision on which lender you should use may be largely influenced by the recent actions that the government has taken.
Banks have experienced extraordinarily high levels of mortgage defaults. When the housing market bubble burst, people were unable to afford their homes and simply walked away from them. This left banks with underperforming mortgages sitting on their balance sheets without a necessary return on investment. Not only did this cut into the ability for banks to lend money for people looking for a mortgage, but it has forced banks to tighten the lending belt for business loans and virtually other loan as well.
Since the government has exerted a great deal of priority in finding solutions to the unemployment issue, increased efforts in solving the unemployment problem have been implemented in an effort to create more jobs. Now, it's worth noting that short of putting millions of Americans on the government payroll, the government can't actually create any jobs. However, what it can do is create an environment that is conducive for businesses to grow and expand and to hire more people, thus lowering the unemployment rate. For this reason, the Federal Reserve has announced that it will continue its mortgage-based asset purchasing program.
How this works to affect jobs is that the Federal Reserve will go to banks and purchase their defaulted mortgages. What this does is allows the banks to have a return on their investment and also helps them to release these underperforming or defaulted mortgages from their balance sheets.
The consensus of opinion is now that the banks have received some profit for their underperforming mortgage programs and they are no longer culpable for any losses that may come from defaulted mortgages, they will be more willing to loan money. This is believed to be one of the best ways for banks to begin relaxing their stringent lending guidelines. The government as well as economist are hoping this will positively impact people looking for mortgages and businesses looking for the capital to grow and expand.
Whatever type of lending institution you look for when you're trying to expand and grow your staffing company, you need to make sure that the lender offers the services that are going to best facilitate your staffing company. You'll also want to make sure that lending rates are competitive and that the company has a good reputation from past and present customers.
Receivable Financing Rates
Financing Rates at 0.69% to 1.59%