Payroll Funding for Security Guard Companies
Security company factor financing provides cash advances of 85-93% by selling your open guard company accounts receivable on an ongoing basis. Like a bank line of credit, Security Company Payroll Financing through factor financing helps security guard staffing firms meet weekly payroll and also includes bad debt protection.
Security Company Funding through Non-Recourse Factor Financing
The need for trained Security Guards in our communities is increasing across the USA and the globe. In 2020, the US Security Industry was worth more than $46 billion and employed over 810,000 individuals (Statista). Recent surges in the Security Guard staffing industry have caused significant cash flow issues for companies providing guard service. Commercial customers require the Security Guard Company to extend 30, 60, or 90-day payment terms. Business owners cannot finance their operations with these terms causing immense financial stress.
Many Security Guard staffing agencies are unaware of alternative business funding such as Security Guard Factoring Financing. Also called invoice factoring is a cash flow financing and commercial funding facility for security companies lacking working capital. Security Company Factoring Financing is an excellent solution for the not-yet bankable security staffing firm that needs quick cash flow.
Security Company Payroll Financing through factoring financing helps security guard staffing firms meet weekly payroll. Overcome your financial constraints today and receive the working capital to grow your security company.
Causes of Security Company Financing Issues
Security guards’ staffing offers protection and safety to their customers and the communities they serve. However, offering extended payment terms, meeting weekly payroll funding, and training guards for certifications is capital intensive. It is common for startups and firms in growth mode to experience cash flow shortages as they have a gap in their payables vs. receivables outstanding.
Issues Security Guard staffing company faces with business financing:
- Unbankable or not-yet bankable: small and startup agencies do not have the financial position to secure traditional lines of credit or SBA Loans.
- Paying Weekly Payroll: Payroll funding is the most significant expense for security staffing firms. When your customers pay months after service, it is hard to have the working capital for your payroll each week.
- Need Fast Financing: In times of rapid growth, it can be challenging to forecast cash flow accurately. Traditional financing takes months for funding. This is where security company factoring financing resolves cash flow issues.
If your security company fits any of the issues above, contact our Security Factoring Financing team. We can walk through your financials, business operations, and capital needs to develop a funding program for your business.
What is Security Company Factoring Financing?
Security company factoring financing provides cash advances by selling unpaid accounts receivables. Factoring financing, called accounts receivable (A/R) factoring, is a transaction where a security company sells its open AR invoices to Bankers Factoring.
Bankers Factoring, a non-recourse factoring company, pays the security guard company in two cash payments. The first is a cash advance up to 93% of the total A/R value. Second, a final disbursement of the remaining balance less our small fee. Security guard staffing factoring provides quick working capital for payroll funding, creates financial stability, and helps grow your business.
How Does Funding Work?
The funding process in factoring financing consists of three essential parts:
- The factoring transaction process
- How much does factoring financing cost?
- How to qualify for funding?
The factoring transaction process
Factoring financing is a sale of security company AR invoices, whereas traditional financing typically involves debt financing via a loan. The first step is to complete the online funding application.
Once the agency is approved for funding, we cash advance up to 93% of your invoice value the same day as approval. Lastly, once your customer pays the invoice, we disburse the remaining balance less our small fee.
Learn more in our previous article, “The Best Staffing Factoring Company.”
How much does factoring financing cost?
The cost of factoring is based on the volume of financing, customer credit quality, and the overall risk associated with the business. Bankers Factoring rates start at a competitive .95% up to 5% per 30 days. We assess risk from your company, customer, and industry profiles. Factoring rates decrease as your monthly receivables increase.
Learn more at “Factoring Rates Explained.”
How to qualify for funding?
Qualification standards are easier for factoring financing, which makes funding more realistic for distressed companies. The main criteria for security guard factoring is a creditworthy customer with a strong history of paying bills on time. All factoring companies should verify and validate the legitimacy of invoices before funding. If your security guard staffing company fits these standards, you have a solid chance to qualify:
- No performance or service issues. Your security guard company needs to provide excellent service
- Creditworthy customers
- No back taxes, including employment taxes
- Profit margins above 25%
Security Guard Company Factoring Financing vs. Bank Loan
Factoring financing provides quick working capital to security guard companies through alternative financing called invoice factoring. Traditional bank loans require strict underwriting, including credit, collateral, and strong financial statements. Conventional debt financing through the SBA and financial institutions is hard to obtain for startups and financially distressed business owners. Most importantly, security staffing companies secure payroll funding which helps keep their best talent on staff.
|Invoice Factoring Advantages||Bank Loan Disadvantages|
|Quick and easy funding process: 1 to 2 weeks||Long funding process that can take up to months|
|No debt on your balance||Monthly payments|
|It does not require good credit||Requires great credit and capacity|
|Credit Protection / AR Insurance||Non-repayment damaged credit|
Bankers Factoring Security Company Factor Financing
Security company factoring is essential to provide the payroll funding staffing companies require. Funding startup security companies can be challenging. Factoring Financing helps overcome cash flow financing and business funding obstacles. With our similar staffing agency financing, our owner-employee team understands weekly payroll funding is vital to your operation and success. That is why we provide our Security Guard Company factoring clients with credit protection through AR Insurance. We protect your company from your customer bankruptcy, insolvency, or short pay via bad debt protection.