4 Ways Factoring Can Alleviate Payroll Anxiety for Staffing Agencies

May 22, 2024 | Blog

 

Managing cash flow is one of the biggest challenges staffing agencies face. Ensuring your team gets paid on time while waiting for clients to pay their invoices can create significant stress and uncertainty. At Sky Business Credit, we understand these pressures and are here to help through factoring, a type of financing in which a company sells its accounts receivable (outstanding invoices) to a third party (known as a factor) to obtain immediate working capital and cash flow.

Four ways our factoring solutions can alleviate your payroll anxiety and stabilize your business:

 

1. Immediate Access to Cash

One of the primary benefits of invoice factoring is immediate access to funds. Unlike traditional financing methods, which can take weeks to process, factoring allows you to receive up to 92% of your invoice value upfront. This means you can cover payroll and other essential expenses without delay, establishing smooth operations and peace of mind.

When your customer pays the invoice, you receive the remaining 8% balance, less our fees. This ensures you have continuous cash flow without waiting for long payment cycles.

Imagine you’ve just secured a large contract, but payment won’t come through for another 60 days. With factoring, you can receive most of that invoice value right away, allowing you to pay your staff and meet other obligations without stress.

 

2. Transparent and Affordable Rates

At Sky Business Credit, we offer competitive fees and rates to make factoring an attractive option for your business. Our ledgered line of credit features fees as low as 0.5% for invoices paid within 30 days, and interest rates as low as Prime + 2%, annualized, charged only on the amount you choose to borrow. You will always know what to expect, with no hidden fees or surprises.

If you factor an invoice of $10,000 and it gets paid within 30 days, you might only pay $50 in fees, plus any interest on the amount you’ve borrowed. When the invoice is paid, you’ll receive the remaining balance, getting the full benefit of your earnings.

 

3. Flexible Financing Based on Your Customer’s Credit

Traditional lenders often base their decisions on your business’ financial history, which can be a hurdle if you’ve faced challenges in the past. In contrast, our factoring solutions focus on the creditworthiness of your customers. This perspective and flexibility means we can provide funding even when other lenders can’t, helping you maintain cash flow and stability in any economic climate.

Even if your business had a rough quarter last year, as long as your customers have good credit, we can provide the funding you need to keep moving forward.

 

4. No Strings Attached

With traditional financing, you’ll need to adhere to financial covenants and an audit schedule. With Sky Business Credit, there are no restrictive conditions, covenants, or time-consuming audits to deal with. We make financing straightforward and stress-free.

 

It’s About More than Money

Supporting a growing business is about more than money, it’s about supporting the people behind the business. We’re here to help make sure your team gets paid on time, so you can maintain a motivated and productive workforce.

If you’re anxious about cash flow and/or facing challenges, we invite you to explore how our tailored invoice factoring solutions can realign your finances with your operational needs. Please reach out to learn more and discuss if this financing is a good fit for your business.