CASE STUDY:
Invoice Factoring for Temporary Staffing
Other CASE STUDIES
Client Overview
Company: StaffX
Location: Denver, CO
Industry: Temporary Staffing Company
Annual Revenue: $18M
Background
StaffX provides temporary staffing in light industrial, logistics, and distribution. StaffX was a roll-up of several regional staffing companies founded by three experienced staffing company operators.
Challenges
- Daily Working Capital Demand: StaffX offers daily pay to its employees and can’t wait 30-60 days to receive payment from their customers.
- Start-up. Unable to obtain traditional bank financing because it is a start-up, its equity was only sufficient to support payroll for less than 10 days.
- High Growth: Due to the owners’ experience, the company would receive orders for labor it could not fill.
Solution
StaffX found Gateway Commercial Finance after a search for a factor that could work quickly without requiring all customers to be factored. Gateway is an experienced factoring company in temporary staffing with a niche in funding start-ups.
Factoring Process
- Invoice Submission: StaffX submitted invoices to Gateway on Tuesdays and Thursdays.
- Advance Funding: Within 24 hours from submission, StaffX received a (90%) advance on their invoices.
- Balance Payment: Once the customers paid the invoices Gateway released the remaining 10% (minus a small factoring fee).
Results & Impact after 45 days
“There are lots of factoring companies out there. From our first call with Gateway’s team, they delivered on every one of their promises, I mean everyone. I’ve worked for other large staffing companies that used factoring and never had this type of experience. I know it’s hard for a factor to make daily payroll work, but their people and system do it flawlessly.”— Marissa Miller, Co-Coach of StaffX
- Day-One Cash Flow Security: Over the first 2 weeks, StaffX maintained consistent daily cash flow, ensuring daily payroll and driver per-diem were paid.
- Order Growth: The company managed to fill labor orders often within hours due to having a reputation for paying employees daily.
- Employee Retention: Timely payroll and a good employer reputation help StaffX retain its talent.
- Preparedness for Future Growth: With reliable funding in place, happy employees, and a growing labor pool to immediately draw on, StaffX came to be known as a reliable labor provider in a tight labor market.
Conclusion
Factoring provided StaffX with confidence. Confidence in knowing payroll would be there daily, confidence in knowing their reputation in the labor pool would be preserved, and confidence in telling their customers that they could immediately fill an order. This type of confidence is not easily found and takes a delicate balance of professional management of the A/R and getting customers to pay. A national staffing company purchased StaffX after only 30 months in business.
Learn more about this service
Contact Gateway Commercial Finance Today:
Interested in learning how factoring can help your temporary staffing agency? Call 1-855-424-2955 or talk to a decision-maker for more information.