19. July 2012 12:03
The staffing industry has some of the most unique working capital needs of any industry. The reason is simple: it provides a very unique product, and truly obtains very little trade credit support. This creates financial situations that rarely arise in other industries. Working with a finance company that knows how your business operates and specializes in staffing financing is important to get the best funding for your company.
The first challenge faced by staffing companies is high payroll that can vary drastically. Because you provide staffing solutions for so many companies, your workforce has to be larger than a similarly sized company in another industry. A larger payroll makes working capital needs more intense because you're required to pay each week yet your customers may take several weeks to pay you. There is no product buffer in staffing; you need to make sure everyone gets paid every week, and sometimes that means payroll funding or staffing financing is a necessity
In addition, the industry is inherently variable. The staffing industry has to adjust based upon the needs of the industries it serves. For instance, in the medical field, payroll needs and margins can vary dramatically between doctors, nurses and aides. During high growth periods the need for cash intensifies but when sales volume decreases you may become more liquid. You can help bridge the gaps in your finances left during sudden fluctuations by seeking out staffing financing tailored to your unique working capital needs.
Crestmark is proud to provide the kind of specialized financing and knowledge that staffing companies need. We maintain an entire division devoted to serving staffing companies, providing the kind of lending solutions and payroll funding that suit the industry's unique business climate.