Temporary employment agencies play a vital role in the employment scene in Australia. These agencies help companies in a wide variety of industries to avoid interruptions in business operations and production by providing staff often on very short notice.
Running a temporary employment agency might sound simple; find clients that are willing to accept your candidates for temporary or contract assignments, sign a contract with those clients, find the right employees for those jobs, secure the proper insurances in order to send your employees on assignment, hire the employees, send them out on assignment, then bill for your service.
But there’s a catch… your employees expect to be paid weekly for the work they are doing, and they are your employees, so they will expect a to be after week 1. However, your client invoice will not be paid for 30, 60, up to 90 days and sometimes much later. If you continue to send this employee out on assignments, he or she will still expect to get paid weekly. In the meantime, rent, telephone, internet, advertising, and other costs are coming due and you still haven’t received payment 1 from this client. Multiply employees by 10 or 20 and clients by 2, 5, or 10 and you can see where you may need some cash flow in order to “carry” your working capital costs.
The agency might have enough money to recruit employees to fill the demand, but it might not have enough readily available cash to pay them once they have completed their assignment.
So where do they find finance for your working capital? Many people would go to their banks.
First of all, a temporary employment agency generally does not have any tangible assets with which to secure a loan. Banks look for assets such as real estate, machinery or equipment-something physical that they can place a lien on wherever it goes so that in the event of default, the bank can still lay claim to and liquidate that collateral.
However you have a current asset on the balance sheet – your accounts receivables, or future payment due from your client. How do you take that current asset and turn it into cash immediately so that you can continue to run your business?
That’s where Cash Resources Australia can assist you. We can advance you up to 80% of the value of your invoices within 48 hours. As your clients pay you forward the money to Cash Resources Australia.
The balance less fees are paid when you collect all of your invoices thus bridging the gap between you paying your staff and getting paid by your clients.
It a very flexible service where there are no long-term contracts, no minimum values and it is completely confidential. Click here to find out how you can have your invoices paid in just 48 hours.