There are two examples of temporary staffing agencies that can face a cash flow crisis. The first is when the agency is just starting out and the second is when it enters a period of rapid growth. Neither situation is attractive to banks considering applying for a loan. On the contrary, both of these situations may sound very attractive to several factors, and this article explains why.
When the nurse stuffing business is just getting started, it lacks two important attributes for banks to consider it a good loan candidate. First of all, start-up staffing agencies don’t have the tangible assets to secure a loan. In fact, the company’s main asset is accounts receivable, but unfortunately it’s not specific enough for banks as it can quickly disappear without notice. Banks look for more specific assets such as real estate, machinery and equipment. This is a physical thing that allows you to set liens wherever you go, and even if a default occurs, the bank can claim and settle the collateral.
On the other hand, some nurse staff factoring companies are willing and capable of working with start-ups. Rather than lending money, Factor provides cash based on the staffing agency’s assets, especially the quality and liquidity of accounts receivable. Even if the staffing agency goes out of business, you can continue to collect invoices issued before the store closes.
The second area that can prevent new staffing companies from getting business loans is that banks offer loans based on the company’s historical financial performance, not the chances of success. Banks are just starting out with a nurse staffing that has no financial history and considers banks as dangerous as having bad ones. In addition, banks have traditionally not considered lending or crediting companies that have been in business for less than three years due to the high failure rate of new businesses.
Again, some nurse staff factoring companies take different approaches to funding new businesses and are so easily dependent on the fact that they just open the door. there is no. For starters, the factor considers the quality of the company’s accounts (the creditworthiness of their customers and the validity of their invoices), which allows them to fund even when the company is new. Nurse stuffing factoring companies take a different perspective when investigating the creditworthiness of their clients’ customers. As long as the client has a nurse in a high-paying medical facility and has the element of being able to receive payment for the invoice purchased, the actual agency credit will be a detail of the grand plan of things. ..
As I said earlier, another time when temporary staffing companies need cash is a period of rapid growth. For example, a temporary agency may need to sign a contract with the largest hospital in the area and immediately hire and staff 20 more nurses. The agency may have enough money to recruit nurses to meet the demand, but may not have enough cash to pay the nurses after completing the shift. .. This situation is very common in the world of nurse staffing.