Factoring Line of Credit for Payroll Expenses

Based in Boca Raton, Florida, a company offers recruiting and staffing services for both permanent and temporary positions for clients in the healthcare and medical industries. They identify, select and place traveling executive nurses, allied health specialists, pharmacists, physicians, and hospital management executives. The nine-year-old company had a business plan in place to grow, but high payroll expenses caused a cash flow crunch. They needed an influx of working capital, but because of historical losses, traditional financing was not an option. They began researching financing alternatives. As part of this research they approached their accountant for recommendations on financing and breaking out of their cash flow issues. It was crucial for them to choose the right factoring company to work with. The company must feel comfortable with their expertise and willingness to help them through the sometimes difficult process. Their accountant was familiar with factoring and recommended a factoring company he had worked with in the past. A good factoring firm will be one that understands your industry and has been in the business a good amount of time. Their accountant knew the factoring company had a long history of working in both the medical and executive search/staffing industries. This included providing specific payroll staffing financing solutions for many years. Allowing for an immediate trust the factor would have a deep understanding of the niche issues of the company’s industry and will better be able to help overcome any obstacles. One hurdle the factoring company had to overcome was verifying invoices. Many of the company’s nursing home and hospital clients use Shift Wise, a third party billing program. It lists costs by time sheets, which didn’t always match up perfectly to the invoice numbers the factoring company received, making the verification process challenging. Another problem Shift Wise presented was getting checks made out to the factor. They knew many payments would go to the company initially, so they had to develop a comfort level that they would forward those payments to the factor. The factoring company smoothed out the bumps in the road and provided a $800,000 factoring line of credit that quickly gave the company the crucial cash flow they needed to meet payroll, grow and stabilize the company’s financial condition. By choosing the proper factoring company with deep experience in the medical staffing industry, the company was able to efficiently and successfully get the funding they needed.