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CONTACT

Marty Orenstein, CEO
at (516)627-0776 or email to confidentially discuss your needs.

Funding & Financing Definitions

Line of Credit/ Credit Line-
A credit source primarily provided by a bank. It is like an account that can be readily accessed or not tapped at all. There is a cap assigned to the credit line and rigid formulas that must be adhered to.

ASSET BASED LENDING/LENDERS-
Any kind of lending/financing/ funding secured by a distinct asset. If the loan is not repaid the asset is taken away.

ACCOUNTS RECEIVABLE FUNDING
ACCOUNTS RECEIVABLE FINANCING
ACCOUNTS RECEIVABLE FACTORING -

Especially in this credit restrictive environment a staffing entrepeneur struggles to obtain capital to meet their temporary payroll funding / contract payroll funding as well as to finance the growth of their business. To raise working capital the staffing service sells their qualified outstanding invoices /outstanding receivables at a discount to a financing company /factoring company. This process provides quick cash and immediate working capital to the temporary staffing company.


PAYROLL FUNDING
UNLIMITED PAYROLL FUNDING
TEMP AGENCY PAYROLL FUNDING
PAYROLL FACTORING - BACK OFFICE SERVICES-

These are terms used by specialized staffing industry funding / financing services. They usually provide unlimited funding-unlimited financing so that a staffing firm can fill almost any size order and also gives them the ability to compete with the large Nationals. The funding or profit up front is most often collateralized by the staffing companies accounts receivables. The advance rate usually varies between 70 and 97%. Some of these firms also provide back office services, if required. These services consist of payroll processing, invoice preparation, accruing workers compensation and all related reports.

FUNDING FANATICS VIEWPOINT -
If you can secure an AMPLE line of credit from a bank that will support your current as well as exponential future growth that's the least expensive way to go. However, with the current restrictive formulas being imposed by the majority of the banks, once you fall out of formula be sure that they can't automatically transfer you to their factoring or asset based lending divisions. In many cases when this happens your interest rate can just about double.

Credit Line -
In our opinion this is even more important than the rate of interest. The temporary staffing industry usually emerges from a recession up to six months before the general economy. The important thing is to have a "leg up" on your competitors when the orders once more start flowing in. NOW is the time to be proactive and to arrange an unlimited amount of credit with an Asset Based Lender (ABL) or with a staffing industry funder. Other factors to consider are the flexibility of the financing source in negative as well as positive instances, as well as the lender's knowledge of the staffing industry.

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Publications




Staffing Success (ASA)
Monitor (TechServe Alliance)
Dialogue (ACESS)
Staff Digest
SI Review

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