5 Ways of Funding For Temp Agencies
Competition in the employment industry has always been cutthroat. The industry has a rise and fall in supply and demand. Emerging and trending technology contribute to the fluctuations. However, not all employers are on the hunt for a long-term employee. At times, the stent is for a temporary role, and hence temp agencies jump in. Uncertainties in demands can cause financial troubles. There are multiple resources to examine funding for temp agencies. The alternative funding options dispense consolation till the time the demand surges again.
What Are Temp Agencies?
As the name suggests, temp agencies supply temporary employees to organizations with pressing needs. Temp services primarily hire for temporary, part-time, or temp-to-hire positions. A company and temp services enter upon a deal where the latter handles the entire payroll process for the employee. The client addresses only the task-related concerns like role training, delegation, and feedback. The payment and other benefits are subjected to the policies of a temp agency, and the client company plays no part in it. More so, in case of unsatisfactory employee work, the company raises concern with the temp agency. It is the temp agency that needs to issue a warning or terminate employment.
Difference Between Staffing And Temp Agencies
The difference between staffing and temp agencies is on the grounds of two key factors-
· Employment term
This signifies if the client is looking for long-term relations or a short-term engagement.
· Priority of client
Companies seeking temp services have a priority of immediate joining over the right-fit candidates. Hence, temp services are driven to choose applicants who are available immediately rather than determining whether they are a right fit for the role.
Options For Funding Temp Agencies
Temp agencies often see an ebb and flow situation in the market. Hence, they need to seek funding from external sources. There are quite a few options to choose from funding for temp agencies. Some of the most sought after possibilities are listed below.
Invoice Factoring
Invoice factoring has been in the financing industry for ages. Many industries resort to factoring funding when their unpaid invoices bulk up. Temp agencies follow this path for similar reasons.
Payroll Funding
This is targeted dedicatedly to receiving financial aid for paying the employees. It is a short term
Line Of Credit
For temp agencies with a good track record of collateral, it is easier to receive a line of credit from banks or lending services.
Accounts Receivable Financing
Another way of benefiting from unpaid invoices is to sell them at discounted prices for immediate money payments.
Bridge Loans
When permanent financing is not working out, temp agencies can seek bridge loans. These loans are quick money payments between two transactions on hold.
Conclusion
Temp agencies are significantly different from mainstream hiring agencies. Therefore, financial constraints are a common scenario for them. Depending on the market status, the agencies can opt for short-term or long-term funding options. Either way, funding for temp agencies is now easier than ever, with several resources to dissolve the crisis.
