Factoring is a popular form of commercial finance for Temp Staffing companies because it provides unlimited access to working capital.
One of the obvious reasons is the high payroll that must be made weekly or bi weekly.
Adequate financing can’t be obtained by banks most of the time since staffing companies do not have enough assets for the banks to get comfortable with, many service based industries have this problem.
With factoring, staffing companies can take on new clients because they have the cash flow necessary to hire new employees not having to fear the increase in payroll. This is also very beneficial for start up staffing companies. As long as they invoice credit worthy customers, payroll is readily at hand.
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