Factoring companies have been a part of the staffing industry for a long time. Factoring and staffing companies work well together because of the nature of the staffing industry. Staffing companies provide a service that is easy for factoring companies to measure and analyze.

When picking staffing factoring companies there are a lot of choices.

It’s easy to become quickly overwhelmed when choosing a factoring company because of the wealth of firms to choose from. Each company offers slightly different structures, and have different business processes that make a big difference depending on what your priorities are. Make sure to take the time to approach the search for staffing factoring companies methodically and the results will be much better.

How to Pick a Factor

• Make a list – Talk to your industry contacts. Because factoring has such an extensive history in the staffing business, the first thing you should do is call some of your industry contacts. Make a list of the companies that get good reviews and bad reviews. Call some other staffing companies that are similar in size to your company but aren’t direct competitors. Maybe they specialize in servicing a different industry or a different geography. Also, call some of the professionals that service the businesses in your industry like, lawyers, insurance brokers and accountants. They will be able to point you in the right direction.

• Do the research-- Once you have a list of at least five factoring companies that have good references, spend the time to do some independent research on the internet. The following are good sources for doing research on staffing factoring companies:

  • The International Factoring Association, (IFA) www.factoring.org -- Any factoring company of substance will be a member of the IFA. The IFA does a good job of screening new members and monitoring the activities of existing members.

  • The Better Business Bureau, (BBB) www.bbb.org -- The BBB continues to be a good community forum for business reviews and references. Each company is assigned a letter grade by the BBB and there should be a list of any complaints.

  • Commercial Finance Lender’s License, www.corp.ca.gov/fsd/licensees/ -- Staffing factoring companies are often considered lenders by regulating authorities, and if they have any clients in California they are required to have a Commercial Finance Lenders license. Click the link above to search for the licenses of the factoring/accounts receivables management firms on your list.

  • Set your priorities -- Before you begin to call the firms on your researched list, take the time to organize your priorities. Is pricing the most important thing? Is advance rate? Flexibility? Ease of Use? From your priority list write down all the aspects of your top priorities. If pricing is your tip priority, jot down all the features of pricing that you think of and make sure to ask each factor you interview the same questions. This way you are sure to make accurate comparisons.

  • Call the references – Once you narrow your list down based on your priorities, make sure to ask the accounts receivable management firm for a list of companies they finance that are similar to yours. Call all the names and make sure that what you are told by the factoring company is confirmed by the references.

When approaching the market for a new staffing factoring company, take your time and do your research. This decision has a big impact on the performance of your business.

Fast A/R Funding specializes in helping small businesses bridge the cash flow gap with factoring. Get more informtion on Electronic Factoring, or call 888.833.2286 to speak with one of our small business finance consultants.