When it comes to invoice financing for your recruitment firm, if you can do it alone – great! That’s a remarkable achievement and should be celebrated. It might sound weird coming from a payroll funding company, but if that option is working for you and your goals, good for you. It enables you to manage your business yourself without relying on investors.The downside of self-funding, of course, is that you cannot run or grow your business if you do not have enough working capital on hand. As staffing is a cyclical business where often your money is tied up in receivables from your clients, sometimes this can be a challenge. The reason payroll funding companies like us exist is because for growing staffing firms, there is often a need for this service.
Pros and Cons of Self-Funding:
Most cost effective in the short-run
No external reporting
Collateral is unencumbered
Money is tied up in receivables
Capped ability to grow
No support or strategic partner specializing in the industry
When to Self-Fund
If you are comfortable where you are currently at and not looking to grow, self-funding is probably the best option for you. If you can afford to wait out the 30-60-90 day periods when your money is tied up in receivables and still pay your workers weekly, it is a good option.
When to Look Into Payroll Funding
If the time ever comes when you are ready to grow your firm to the next level and afford to take on bigger contracts, payroll funding is a good option for several reasons:
It allows you to access the working capital normally tied up in receivables
There is usually an option to also take some back office tasks like invoicing and payroll off your hands
Work with a strategic partner who can help you in other areas of your business too, like M&A or teaming
If it is time to start a conversation about payroll funding, please reach out to us at any time to schedule some time to talk about growth goals.
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Jeremy Bilsky is the Senior Director and General Manager at Advance Partners. Jeremy has direct leadership responsibility for the Advance Partners business unit, leading the senior management team and all related functional areas. Jeremy has been with Advance Partners for over 15 years in many capacities, including General Counsel, Director of Portfolio Management, and serving on the executive team managing and overseeing Advance Partner’s internal risk functions. Read full bio