Factoring is used by companies for many different reasons. One reason to use factoring is lack of working capital due to timing of customer payments.
Challenge: A common problem many staffing companies encounter is the timing of cash flow. Many times, companies have weekly payroll; however, their customers pay on a monthly basis.
Solution: Factoring is a great solution because staffing companies receive working capital as soon as an invoice is generated; therefore, it is a way to confidently fund weekly payroll, without waiting for customer invoices to be paid.