Staffing Company Profits Soar from Factoring !

Case Study 83704 – The Staffing Company from  Boise, Idaho

When I received a call from Russ at a Staffing firm in Boise, Idaho, he told me with great enthusiasm that he had just landed a large contract with a government agency on the East Coast. He said initially they needed 10 programmers, with the opportunity to expand even more as the project progressed. Although he was thrilled at the potential opportunity, he was unsure about how he could raise the working capital needed to fund this project. So, he was hoping that we could offer him financial assistance.

During the initial due diligence process and we discovered that Russ’s Company would be an excellent match for factoring. We looked at his experience in the industry, the profit margins that his company had been posting and his new client, which had an excellent credit rating. When we examined these variables, we knew that factoring would be a great relationship for both of us.

As we continued with the due diligence process, Russ came up with some outstanding questions. He first wanted to know, if he put more programmers onto this account, whether we would be able to provide him with the additional working capital that he would need to keep business running smoothly. We assured him that this would be achievable as the amount we would be able to advance him would be based on a percentage of the total invoice amounts. Then, I further explained to him that as his business grew, so would his available cash flow through factoring.

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Russ also wanted to know how long it would take to get his money once he turned in his invoices to our company. We explained that we would typically offer Same Day Funding, unless the invoice was received later in the day. Russ was relieved to hear this news as his programmers work all month long, with the expectation to be paid by the 10^th of the following month.

I gave Russ a Super Saver Tip that saved him a great deal of money over our 4 year relationship. His client usually paid their invoices on a 45 day cycle, so I mentioned to Russ that it might make sense to invoice his client on the first of the month and email us the invoice on the 7^th of the month. I further explained to Russ that it would be advised to get the client’s payment process rolling as soon as possible, in order to make the entire funding process smoother. This suggestion would mean that if Russ were to be paid from the client by the 7^th of the next month, his factoring fees would only be for a month. Therefore, he would be saving 7 days of factoring fees each and every month, amounting to a significant savings over the length of the relationship.

The Factoring Business is a wonderful business to be in; you meet a lot of great people. Some people you can help, and others you can’t yet the people you can help usually turn into a Factoring relationship, while the others help to teach you more about businesses, their needs and the opportunities that exist.

Russ’s Staffing Company’s gross annual income increased TEN times from his previous year’s gross annual income when he leveraged the power of Factoring!

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