When you have an existing relationship with a payroll funding agency, it might seem easier to just let things be rather than look elsewhere. After all, your firm knows your staffing business, and getting out of your contract could be a hassle. In some cases that may be true, but in cases where you are outgrowing your funder, it is worth exploring better options. Picture this scenario: your staffing business needed an influx of cash flow, so you started looking around at your options and ultimately chose your local funding company. The cash flow allows you to pursue new business and larger clients. So you grow. And grow. Maybe you expand offices. You need more back office support to keep up with the growing demand. Suddenly the local boutique is struggling to keep up.
Many staffing firms who find themselves in growth mode face this dilemma. So, what do you do? Do you stay with your local funder out of loyalty, or do you entertain other options? As the title of this blog suggests, we think it is worth considering another funder for several reasons.
1. Rate Woes
If you have been with your funder for several years, you may be locked in to a rate that reflected your volume and size before you started to grow. Growing firms are in a better position than smaller businesses to negotiate for extremely competitive rates, and a better rate can save you a lot of money over time. Other payroll firms who want your business are likely to work with you on rate, and at the very least you might be able to use your new quotes as a bargaining chip with your current firm.
2. Other Hidden Costs
Besides pure rate, there are other costs to staying with your current funder. What about the cost of not having adequate back office service? If you have an influx of business, payroll taxes and invoicing can get very complicated and a small boutique firm might not be able to keep up. For complicated businesses, you really should have a dedicated team rather than one person handling all your needs. Additionally, back office technology is advancing, and if your firm isn’t using new state of the art back office systems, you could run in to problems.
3. Nearness Doesn’t Always Equal Service
In the age of connectedness, being close to your specialty funder does not necessarily translate to better or faster service. Whether your funder is down the street or across the country, your cash will still come weekly. Payroll funding and back office services are performed remotely, and questions are one phone call away.
We have seen firsthand that local doesn’t always mean personal service. Recently, an Advance Partners sales rep was talking to a prospective client and it became clear that while they had a local funder, their funder had not actually been in to see them in a decade. Our rep halfway across the country had visited more times than they had. If your funder has become complacent, it may be time to look elsewhere for better service.
Advance Partners is the #1 provider of payroll funding to staffing firms in the U.S. We have dedicated service teams that ensure every client’s needs are met, no matter the complexity. Our mission is to help staffing firms grow, and we have helped hundreds of staffing firms to do just that.