Temp Staffing Industry Adds a Third of June’s Jobs

It has been a banner month for the temporary staffing industry. Staffers led U.S. employment growth in June by adding more than 25,000 jobs to the American workforce. About a third of American jobs created in June were in staffing, according to the American Staffing Asssociation’s July 6th  edition of Staffing Today.

According to Richard Wahlquist, president and CEO of the American Staffing Association “Businesses continue to be very cautious about hiring in the current uncertain economic environment.” Mr. Wahlquist believes this is good news, reminding job seekers “that staffing firms offer immediate employment as well as opportunities for permanent placement.”

This is good news not only for our healthcare staffing factoring readers, but it’s interesting news for our manufacturing staffing factoring readers as well as our entire temporary staffing payroll funding clientele.

Keep in mind that the job growth is actually good news for Americans everywhere. The rise of staffing is a key indicator of the rise of employment across the board. Even though the rate of monthly job creation has fallen from the First Quarter to the Second, more growth is on the horizon for the remainder of the year.

How Corporate Cash Hoarding Affects Your Receivables

In his article on corporate cash hoarding, Wall Street Journal reporter, John Bussey, asks his readers to “Blame Fear, Not Greed, as Firms Hoard Cash.” Bussey addresses a key problem that directly concerns small business factoring clientele across all industries. Bussey imagines cash-hoarding as a threatening economic measure “of what global business thinks about our times. It isn’t pretty. And, despite what some suggest, it doesn’t appear to be guided by greed or complacency.”

Standard & Poor’s analyst, Howard Silverblatt, estimates that “industrial companies are sitting atop 70 weeks of net operating cash.” That is equal to one year and five months’ worth of spending money that could potentially be owed to you. Companies’ decisions to hide “extreme excess cash,” Silverblatt says, are “reflecting the uncertainty of the times.”

Their cautious, even fearful, decisions to withhold cash come at two expenses. For one, their interest rates have gone down to “a tiny 0.8%, well below the rate of inflation. Bussey, the author of the article, cites “a political price, too. President Barack Obama, the AFL-CIO and others have admonished companies to spend more to create jobs.”

Most important to our factoring clientele, however, is the implication that corporate fear has for their firms: When companies hoard cash, they pay their bills slower. We at the Factoring Blog suggest taking a page out of the corporate playbook. Whether your business is in need of medical staffing factoring, aerospace staffing factoring, military staffing factoring, healthcare staffing factoring, education temporary staffing factoring, manufacturing invoice factoring, trucking or freight factoring, or any other industry, we would be happy to help you hoard cash of your own.

Staffing factoring can help with both cash flow and savings. Of course, a factor’s primary function is to help you pay off your primary expenses. If your corporate customers are slow to pay, your best choice may be to have a factor buy your account receivables for a nominal fee.

Supreme Court Stuns Nation with Obamacare Decision

The outcome appeared uncertain, but in a 5-4 decision, the Supreme Court ruled the Patient Protection and Affordable Care Act to be constitutional in accordance with U.S. tax laws.

Chief Justice John Roberts opined that the individual mandate, the clause compelling all Americans to own some sort of health insurance, was unconstitutional if the penalty took the form of a fine. Instead, if

Americans decided not to follow the individual mandate, they would be taxed in accordance with the burden that any potential uninsured illnesses might pose to taxpayers.

Though, prior to signing the bill into law in March 2010, the president had vehemently denied the bill to be a tax, his wording was corrected by the court on Thursday June 28, 2012.

Beyond compelling Americans to purchase policies from healthcare insurance companies, the bill also limits insurance companies’ rights to severability. The PPACA holds that no insurance company can terminate coverage because of a person’s pre-existing condition.

Limitations upon the rights of private sector insurance firms are subsequently countered by the bill’s expansion of Medicaid. The federal government has offered to fund the expansion in every state, to the tune of 100% of the cost.

The act, pejoratively known as Obamacare, has a host of pros and cons that will be sure to affect the well-being of each and every American. It is unforeseeable how our small business, healthcare factoring clientele will be affected, but we will keep you posted as new information becomes available.

Is a Loan from a Big Bank the Best Financing Option for a Small Business?

Did anyone see the article on CNBC.com called: Small Businesses, Big Banks: Good Fit?

The article basically talked about how small business owners are still facing strict lending restrictions from larger banks like Bank of America, so they’re turning to smaller banks for their small business lending needs. Specifically, the article talked about a couple of small business owners that experienced a season of poor sales (as a result of weather), and how their banking partners terminated their loans as a result. This type of situation happens often enough, and small, local banks have been sweeping into to save the day–in some cases.

Overall, all banks want assurance that borrowers have the means to repay their loans, as well as a secondary source of repayment, such as collateral.If a small business owner can’t show a profitable operating history and/or strong financials, he/she will find it extremely difficult to be approved for a traditional line of credit with any bank.

One alternative financing option that was not discussed in the article, but that would be extremely beneficial for these small business owners is for them to use is accounts receivable factoring. Instead of basing advances on the company’s past performance, a factoring firm is more concerned with the future–As in the company’s accounts receivables. Moreover, because factoring is not a loan, the balance sheet stays clean, and the credit line grows as the company grows.

Click here for more information on the differences between a bank loan and factoring.

Small Business Bank Lending is Down

The invoice factoring specialists from PRN Funding came across an interesting article on CNBC’s web site, entitled: Small Biz Lending Shrinks as Owners Grow Cautious. In a nutshell, there are a number of reports recently conducted involving small business lending, and they all point to one thing–Small businesses are still uncomfortable with adding debt to their balance sheets and/or hiring new personnel.

We have summarized some of the key takeaways from the article with the cash flow professionals and small business owners that consistently read The Factoring Blog:

  • PayNet (a research firm that tracks loans to small companies) released a report on Friday showing that lending fell 2% in April, which was after a 3% dip in March.
  • Thomson Reuters/PayNet Small Business Lending Index fell to 94.1 in April. It was at 110.5 in December.
  • ADP (payroll processing company) said the pace of hiring by the smallest businesses, those with fewer than 50 employees, slowed in May.
  • Both ADP’s report and PayNet’s report had similar  findings, in that both reports showed that small business owners are increasingly reluctant to hire or expand in this uncertain economy. (The monthly survey of small business owners by the National Federation of Independent Business also echoed this finding.)
  • Dun & Bradstreet Credibility Corp. (a credit reporting service for businesses), also had some interesting findings after it surveyed 6000 companies during Q1. Mainly that , 64% of businesses with revenue under $5 million said that lack of financing has made it difficult for them to grow. Furthermore, 55% said that it was also restricting their hiring plans.
  • Dun & Bradstreet also reported that banks are becoming more stringent in their lending requirements for small businesses.

Note from the invoice funding specialists at PRN Funding:

Even though small business loans seems to be trending down, there are still a number of great alternative financing methods available to small business owners. Accounts receivable invoice factoring is a great way for business owners to increase their cash flow without creating additional debt.

Invoice Factoring Case Study: Outsourced Medical Billing Company

The outsourced medical billing factoring specialists at PRN Funding wanted to share one of our more recent invoice funding case studies with the medical billing company owners that read The Factoring Blog:

David had aspirations of entrepreneurship ever since he graduated college. Due to the ever-increasing demand for health care, he spotted an opportunity to start his own medical billing company. As word quickly spread about the company’s unparalleled customer service, David’s start-up medical billing company began getting more calls and business soared. As a result, David needed to hire more medical billing specialists to handle the new demand. Because his customers took about 45 days to pay him for his medical billing services, David realized that he would not have enough readily available cash on hand to pay his employees on time. As a result, David began researching financing options. Unfortunately, because David’s company was relatively new, the bank he initially approached turned him down.

Medical Billing Factoring

David didn’t know what to do. He called his friend Steve, who is a broker for alternative financing companies. Steve informed David about accounts receivable factoring, which would help him stabilize his cash flow through the company’s growth period. Steve referred David to PRN Funding, LLC, who has a dedicated medical billing factoring program.

Small Business Lending on the Rise in 2012

SmallBizTrends.com recently had some exciting news to share about small business lending–The site highlighted some key findings of Omega Performance’s 2012 Banking Trends Outlook Survey, such as:

  1. 19.8% of U.S. banks plan to ease their lending standards for consumer and commercial loans
  2. 73.5% of United States banks plan to do more commercial lending
  3. More than 78% of banks reported they will pursue small business lending in 2012
  4. 66% of U.S. banks think the economy will “improve slowly” for the remainder of 2012

Click here to read more on SmallBizTrends.com: Is Lending on The Up?

What is Invoice Factoring?

In a nutshell, invoice factoring is the process of converting the accounts receivable of a business into cash by selling outstanding invoices to a factoring company for a discount. Businesses who factor their receivables get cash up front to cover payroll and payroll taxes and pay their vendors on time.

PRN Funding’s president, Phil Cohen, explains invoice factoring in more detail in the video below:

Medical Receivable Factoring vs. Healthcare Factoring

When it comes to factoring in the healthcare industry, there are two different kinds of companies that can benefit from what’s commonly referred to as healthcare factoring and/or medical factoring. Both types of healthcare companies make ideal invoice factoring candidates because both routinely bill creditworthy slow-paying customers. The Marketing Manager at PRN Funding took the time to explain the differences in the video below:

The first variation of the healthcare factoring model involves entrepreneurs who own a service-oriented business within the healthcare industry. Specifically, medical transcription services, medical equipment providers, medical supply companies, medical staffing agencies, temporary nurse registries, outsourced medical coding companies, medical billing services, etc. can all benefit greatly by factoring their invoices. Healthcare factoring can be extremely beneficial for vendors hoping to maintain a positive cash flow when their customers (medical providers) take weeks or months to pay them for their services or goods. Click here to learn more about PRN Funding’s healthcare factoring solution.

On the other hand, medical receivables factoring includes a third party payer (i.e. Medicaid, Medicare or private insurance company) within the medical invoicing process. In this instance, the medical provider is the one who benefits from factoring.

Medical receivables factoring is a great way for medical providers to bridge the cash flow gap that is oftentimes created by slow payments from insurance carriers and other third-party payers.

As experts in the healthcare factoring marketplace, PRN Funding has developed relationships with credible medical factoring companies that specialize in helping hospitals, nursing homes, physicians’ practices, etc. maintain a positive cash flow.

Click here for more information on healthcare factoring vs. medical factoring.

Temporary Staffing Industry is Booming

According to the federal Bureau of Labor Statistics, changes in the “temporary help services” category typically prefaces similar changes in non-farm payrolls around 5 months later, and since hitting its lowest point in August 2009, temp jobs have been on a steady incline.

In fact, according to the American Staffing Association, US staffing firms employed 2.8 million temporary and contract employees per day in 2011, which is up 8% since 2010. Moreover, the Bloomberg US Employment Services Index (made up of 17 staffing and recruiting firms) has increased by 15%. Additionally, the temporary staffing industry’s sales was $98.3 billion in 2011, which was 12.4% more than 2010 sales.

Richard Wahlquist , president and CEO of the American Staffing Association, recently said: “Companies no longer look upon temporaries as a gap measure. Now, the largest companies have a specific model of how much of their work force is going to be temporary.”

It’s important to keep in mind that as these agencies continue to grow, the need for staffing payroll factoring will also increase.

Click here to read the entire article: Temp Agencies Signal Economy’s Health, Direction.

Older Posts
Newer Posts