Getting Working Capital for Your Staffing Agency
The staffing industry can be a roller coaster of changes, and it may be difficult to follow the trends on labor demand or even recruiting needs. With social media changing the face of HR departments and hiring managers, more individuals are seeking employment straight from job listings found in open recruiting companies or through online search engines.
There are several ways your staffing agency can acquire working capital. These options include bank lending, lines of credit (secured or unsecured), SBA lending, accounts receivable financing or a staffing cash advance.
Bank lending.A tradition loan from a bank can offer you the best interest rates, but may often be difficult to obtain due to strict lending criteria. Newer businesses without collateral or a strong credit score find it hard to secure bank financing.
Lines of credit.Lines of credit can either be secured or unsecured. It works a lot like a credit, in that your company is offered an amount of money that can be drawn on at different periods in time, provided you don`t exceed the limit. You pay on what you borrowed, and can re-draw funds as funds. A secured line is tied to some form of collateral, while unsecured has a bigger risk and higher interest rate.
SBA lending.The U.S. Small Business Administration’s works directly with lender to provide small businesses’ with working capital. These loans are backed by the government and have great lending terms and low rates.
Accounts receivable financing.There many options that utilize your accounts receivables in order to inject some quick cash into your accounts. The outstanding invoices of your customers are sold or used as collateral for financing.
Factoring. Usually considered the same category as accounts receivable financing, factoring takes open invoices and sell them to a lender. The lender advances a percentage of the amount owed, then seek payment in full from the original customer. Once the invoice is paid, the remaining funds, minus a fee, are released back your company.
Staffing cash advance. In this option, working capital is supplied by a lender who presents you with a cash advance contingent upon predicted credit or debit card sales. A lump sum payment is issued, but repayment is in manageable chunks of daily transactions.
With a little extra cash, you can take your staffing company in new directions and promote growth. You can fund training, hiring, marketing or bonus needs. Working capital is the ticket to future success.