You need resources to achieve success with your staffing firm. Without a solid cash position, you can’t confidently operate your business day to day, much less position yourself for further growth. Invoice factoring can provide the support you need to thrive.
Businesses require diverse funding sources to survive. One study showed that nearly four out of 10 companies (37%) applied for financing in 2020. And that was actually down from the pre-pandemic level of 43% in 2019.
As you look for ways to secure cash, you have a wide variety of options:
- Lines of Credit
- Credit Cards
Each of these methods comes with its own challenges. Many take a long time to secure or require significant paperwork and disclosures. Others, particularly credit cards, come with extremely high costs.
Invoice factoring lets you avoid many of the downsides incumbent to these other funding options. It presents a high-value alternative to find the cash flow you need to succeed. Here are three benefits of invoice factoring to unlock the potential of your staffing firm:
Three Benefits of Invoice Factoring for Your Staffing Firm
Lower Your Funding Costs
Many funding options come with high price tags. Even with interest rates at extreme lows, you can end up overpaying to get the cash you need to expand. This is especially true for shorter-term funding options, when you don’t have time for the drawn-out process of securing a loan.
Invoice factoring can help you lower these costs. Compared to choices like a credit card, the fees involved in invoice factoring let you get the buying power you need without burdening you with ongoing interest payments.
Say you discover a can’t-miss opportunity that requires a cash investment. Will you have the necessary resources at hand to jump on the chance?
What if you run into a sudden hardship? You need to dip into cash reserves to stay afloat during a difficult period. Do you have a big enough emergency fund to sidestep these potential disasters?
You can prepare for both good and bad surprises with invoice factoring. The process offers you another funding option to unlock flexibility in your financial structure. You have another place to turn when business takes an unexpected turn.
Collections are a difficult part of any business. You want to maintain a good relationship with your current customers. As a result, you avoid becoming confrontational with clients who are slow to pay.
This kind of restraint is admirable and probably a solid business decision. However, it leaves you in an uncertain position when you can’t get paid for staffing services you’ve already provided.
Invoice factoring allows you to mitigate this risk. The process involves getting paid for outstanding invoices. You get the cash you’re owed upfront, avoiding cash-flow fluctuations that can lead to dangerous and embarrassing financial situations.
Considering Invoice Factoring for Your Staffing Firm? Frontline Funding Can Help!
Ready to add invoice factoring to your financing arsenal? Turn to Frontline Funding for the flexibility you need to take your staffing agency to the next level.
Contact Frontline Funding today to find out more.