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How to Finance a Staffing Agency

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					?Running a staffing agency requires a combination of good sales skills along with
solid organizational skills. As an owner (or manager) you need to make sure that you
are signing on new clients who will use your staff. At the same time, you need to
recruit quality staff that will ensure that you meet your client's expectations. And
while you do this, you also need to make sure that payroll is handled so that your team
is always paid on time.

For many staffing agency owners, this last point can be a real problem, especially if
the company is starting up or growing too quickly. Most commercial clients will be
happy to use your staff for a contract, but they will pay their invoices in 45 to 60 days.
In the meantime, your company needs to cover all employee payroll. You have to pay
salaries, retain taxes and cover any benefits you offer. Many agencies just can't afford
to wait that long to get paid.

Most agency owners will opt for a line of credit, if they can qualify for this form of
business financing. But qualifying for a line of credit, or a business loan for that
matter, can be very difficult. This is especially true for staffing agencies that have no
hard collateral. As it's well known, most institutions provide business loans to
companies that have both, the earning ability to pay the loan back and enough
collateral to cover the loan if they can't pay it back. Because of this, only staffing
agencies with good track records, solid customers and seasoned management teams
get institutional financing.

Unless you manage to get external funding, your staffing agency's growth will always
be limited by your capital. However, there is one funding alternative that will help
solve your problem. If you look at the situation, you'll see that the problem is one of
timing. You need to pay employees now, but your clients want to pay later. And the
way to bridge this gap is to get an advance on your client invoice. This provides you
with the funds to meet your current obligations and handle new projects.

This solution is called factoring company considers your accounts receivable
(invoices) from good clients to great collateral. Because of that, they are willing to
advance you funds against those invoices. One advantage of accounts receivable
factoring can be a great tool for staffing agencies with good growth potential.

About Commercial Capital

We are a leading factoring company and provide factoring financing for staffing
agencies. For a factoring quote please visit our website or call (877) 300 3258.

				
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posted:4/25/2011
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