Listado mensual: enero, 2023

To remain competitive, your staffing agency’s growth plans need to be supported by a healthy cash flow. Here’s how invoice factoring can help.

 

Job vacancies have been hitting all-time highs across most industry sectors. But for staffing agencies, it means business is booming—and there’s potential to grow quickly to meet market demand. But the ability to meet payroll is a major challenge for staffing agencies looking to grow their business.

So what’s the best way forward? Keep reading to find out why working capital is critical to success and how alternative funding options could open opportunities for growth.

 

New opportunities for staffing agencies

The pandemic redefined the workforce, shifting traditional work models and accelerating the talent shortage. It led to the Great Resignation and Quiet Quitting, followed by further shake ups in the market, such as high inflation and wage increases. Despite the potential for an economic downturn, workers continue to demand increased flexibility such as remote and hybrid work arrangements.

Many businesses and government organizations are concerned about what’s ahead, and whether they will be able to obtain the talent they need. This staffing shortage has had a profound effect across sectors, from healthcare and construction to hospitality, retail and manufacturing. For certain sectors, such as healthcare, these shortages have been particularly acute.

For staffing agencies, however, it represents an unprecedented opportunity for growth. But taking advantage of these opportunities requires working capital and steady cash flow. It often requires funding major expenses, such as payroll, through traditional financing methods while waiting for clients to pay their invoices.

A staffing agency is only as good as its staff

The cost of payroll financing is high, particularly when hiring high wage earners such as IT and medical professionals. If a staffing agency needs to pay those professionals every two weeks, but clients pay their invoices in 30, 45 or 60 days, your ability to meet payroll, hire new staff and increase sales can be a challenge.

Many traditional banks are tightening their lending criteria. Without access to working capital, staffing agencies often struggle to meet payroll and end up passing on business growth opportunities.

How alternative funding can help staffing agencies meet demand

If your staffing agency has to wait on client payments to hire and pay staff or meet other business growth objectives, invoice factoring could be the solution to your working capital needs.

Staffing agencies can use invoice factoring to reliably and quickly access the working capital they need. Unlike traditional financing options, invoice factoring doesn’t depend on how long you’ve been in business or require the same types of documentation. Essentially all you need is credit-worthy clients and customer accounts receivables to secure your funding.

How does it work?

Liquid Capital purchases your outstanding invoices, advances your business up to 85% of the value of your invoices and collects payment from your clients. You receive the working capital you need to pay staff and take advantage of opportunities to grow your business. The remainder is paid back to you on receipt of payment minus factoring fees.

You also decide how long you need to use factoring services—and you won’t be locked into a long-term contract. So during months where you have adequate cash flow and don’t need to factor your invoices, you’re able to opt out of the process.

Perhaps just as importantly, by working with an alternative lender like Liquid Capital, you’re forming an invaluable partnership with an experienced advisor who will look past current challenges to see your potential—and will work alongside you to find the right funding solution to grow your business.

Meeting the demands of the healthcare sector

A staffing agency in the healthcare sector came to Liquid Capital for invoice factoring. The company had been invoicing $30,000 a week but had to use personal credit cards to make payroll while waiting for client invoices to be paid. Not a comfortable situation.

Over time, it became harder to make the minimum payments on the cards, which meant the staffing agency wasn’t able to take on new contracts and grow the business—at a time when demand was high for its services.

Taking advantage of Liquid Capital’s invoice factoring services means they’re now able to stop worrying about cash flow. They can mitigate the challenges of waiting for invoice payments, allowing them to focus on growth—taking on new contracts, growing revenue and training staff.

This has had a profound impact on their business. Two months after they began invoice factoring with Liquid Capital, the staffing agency recorded a six-fold increase to their weekly invoice total. They were then able to hire and place more staff and accept more government contracts.

“All of my clients tell me, ‘I sleep better at night, knowing that I’m going to have the liquidity to operate and I know there are no more limitations.’”
—Liquid Capital Principal

 

Easing cash flow pressures to achieve success

With conditions changing rapidly across industry sectors and in the broader economy, a staffing agency’s ability to respond quickly to meet challenges or opportunities is crucial to success. Invoice factoring can ease short-term cash flow pressures and free up the time and overhead spent monitoring and collecting accounts receivable to remain competitive and focus on new opportunities.

 

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Are you looking to access flexible funding for your staffing agency? Contact a Liquid Capital Funding Expert today to learn how our alternative funding solutions can help you be ready for anything.

For growing businesses, having access to working capital and keeping a healthy cash flow is critical. However, it can often feel like funding your business is a constant challenge. Don’t despair – the following truths will help you maintain the upper hand.

 

Maybe you’re an entrepreneur or start-up, and your money is tied up in outstanding invoices. Maybe your business has seasonal buying cycles, and finding cash flow during slow months is challenging. Maybe you’ve completed work or shipped products, but you’re still waiting to get paid—and in the meantime you have bills to pay.

No matter what your situation is, working capital is the lifeblood of your business. However, finding the funding that’s right for your needs isn’t always easy.

You need to stop losing sleep worrying about covering your operating expenses, growing your business or overcoming cash flow hurdles. 

Here are eight brutally honest things a BDO would tell you about funding your business and achieving your goals.

 

1. The bank can’t always have your back.

Thinking that the bank will be there when you have an exciting new opportunity? Or that they’ll be understanding if you are a relatively new business and can’t provide years of financial reports? As much as your banking representative wants to help you, it doesn’t necessarily mean that they can help you.

In the current economic landscape, many banks have revised their lending criteria and are tightening the purse strings, leaving business owners looking for alternatives to traditional funding. Meanwhile, business needs to keep moving forward.

2. You may think you’re ready for funding, but are you really?

We get it. Running a business (especially if you’re running it on your own or with a small team) is a lot of work – and keeping up on your books may not always be a top priority. 

But if your financial files aren’t in order, if your invoices aren’t properly written, or if you don’t have the right documentation – then securing funding can be even harder.

Start with three items: your budget (planned vs. actual), your income statement and your balance sheet. 

Depending on the lender requirements and type of financing, you might need to prepare a cash flow budget or projections – though it’s always good practice to have this in order anyway. You’ll also want to perform a UCC or PPSA search to ensure your record is clean. Even if you think there are no security registrations filed against your company, it’s worth double-checking the official records. Also, pull a credit report on your business (and on yourself). Sometimes these reports have incorrect information, and it’s important to be aware of mistakes so you can fix them.

 

Make sure you’re set for success. 

Access your guide to becoming lender friendly

 

 

 

3. Not everyone understands your vision.

Chances are when you started your business you had big dreams and plans to grow your company into something great.

So you dedicated yourself to building your business. But have you surrounded yourself with partners and a team that sees the same potential as you do?

When looking for a funding partner, you need to find someone who not only understands your funding needs, but also understands the intricacies of your industry, and what makes your business special.

Traditional funding sources may not always take the time to get to know and understand the ins and outs of your business. When you work with the right alternative funding partner, they’ll take the time to get to know you and your business. That can make all the difference in being able to capitalize on new opportunities.

 

4. Cash flow is the key to agility.

Unless you have a crystal ball, you’ll never be able to accurately predict what will happen to your business and the market in general. If you want to achieve long-term success, then you need to be agile and prepared to make quick course corrections. 

Preemptively building a funding toolkit to overcome whatever opportunities or challenges you may face is critical. And that toolkit should include alternative funding sources. 

Even if you don’t need to factor your invoices right now, being prepared and having a reliable source you can turn to will help you respond quickly to whatever may come your way.

 

5. Question what you are told.

Not all factoring companies are the same—so it pays to do your homework. Many are not transparent, with unexpected or hidden fees or contracts that make it hard to move away from their funding solution. 

For example, the upfront rate may be low, but there could be add-ons that ultimately drive the price much higher, like ‘same-day’ funding. Make sure their terms are straightforward. Still unsure? See if the factoring company has customer case studies or testimonials.

At the end of the day, it’s your business, your livelihood, and it’s on you to thoroughly investigate your funding options and develop a robust working capital strategy with partners you trust.

 

Ask these questions when selecting an invoice factoring partner

 

 

 

 

6. Generic solutions aren’t enough.

While it’s tempting to assume that you can gain access to a funding facility and easily solve your problems, the truth is that your business is unique and requires a careful look at your operations to design the right approach.

At Liquid Capital, we’re business owners too, so we understand one size doesn’t fit all. We’ll take the time to get to know who you are, what your goals are, and the intricacies of your business that make it unique.

 

7. Values matter.

It might sound corny, but aligning yourself with a funding partner who shares your values matters. They will have access to your company and your clients’ information, and you’ll be working with them closely throughout the funding process.

If you can’t be sure that your partner shares your values, then you can’t be sure they will have your back when you need it.

 

8. Invoice factoring is mainstream.

Though you may not be familiar with invoice factoring, this powerful alternative funding solution has been – and is being – used by many businesses, just like yours.

At Liquid Capital we’ve helped businesses across a variety of industries unlock the power of their invoices, and accelerate their cash flow. But why not hear from business owners that we’ve worked with before?

Discover how we’ve helped businesses just like yours access the working capital they need, when they need it.

Read our client Success Stories here.

 

What sets Liquid Capital apart?

We’re North America’s leading invoice factoring specialists, with the largest network of offices across North America. In fact, we’ve deployed over $3 billion in working capital to help businesses grow.

Our Liquid Capital Principals are growth strategy and funding experts who make sure you understand available options so you can pick the right solution for your business.

We offer immediate financing upon approval—up to $10 million, often within 24 hours—along with personalized strategic guidance. Funding isn’t dependent on your balance sheet or time in business, and there are no long-term contracts, hidden fees or debt.

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Ready to unlock the power of your – or your clients’ – invoices? Contact us today to learn more about invoice factoring.