ProStaff Solutions (name changed) is a light industrial staffing agency based in Orlando. When owner Diana first called us, she was three days away from missing her first payroll. Here's how factoring turned her crisis into a growth story.
The Crisis
Diana's staffing agency had grown quickly from 20 to 50 weekly placements. The problem? Success was killing her cash flow:
- Weekly payroll had grown to $38,000
- Her biggest client paid on Net 45 terms
- She had $145,000 in outstanding invoices but only $8,000 in cash
- Her bank declined a line of credit due to only 18 months in business
- Workers' comp insurance was due in 10 days ($12,000)
Emergency Setup
We expedited Diana's application and had her approved within 48 hours. Her first factoring advance of $52,000 hit her account the morning before payroll was due.
- Advance rate: 90% on staffing invoices
- Factoring fee: 3% per invoice
- Funding speed: Same day
- Back-office support: Invoicing assistance included
Facing a payroll crunch?
We can help. Check eligibility now.
Stabilization (Months 1-3)
With reliable funding in place, Diana could focus on operations instead of scrambling for cash:
- Never missed another payroll
- Paid workers' comp premium on time
- Built a 2-week cash reserve
- Hired a recruiter to keep up with demand
- Started taking on new clients she'd been turning away
Growth Phase (Months 4-12)
With cash flow stabilized, Diana shifted to growth mode:
- Grew from 50 to 200 weekly placements
- Added clerical and administrative staffing verticals
- Opened a second office location
- Hired 3 internal staff members
- Annual revenue grew from $600,000 to $2.1 million
Financial Impact
Over 12 months, Diana factored $1.8 million in invoices with total factoring fees of approximately $54,000. The revenue growth she achieved represented a 37x return on her factoring investment. She also improved her business credit score, eventually qualifying for a traditional line of credit as a backup.
Lessons Learned
- Don't wait for a crisis to set up factoring - have it ready before you need it
- The cost of factoring is far less than the cost of missing payroll
- Reliable cash flow is the foundation for every other business decision
- Growth in staffing requires cash flow solutions that scale with placements
If your staffing agency is growing faster than your cash flow can support, factoring is the proven solution. Call 855-767-7771 or check your eligibility online.