If you run a staffing agency, you understand the importance of cash flow. Waiting for customers to pay their invoices can create painful gaps in your cash flow. One solution to this common problem is invoice factoring, a type of financing where you get paid for your invoices immediately rather than having to wait for clients to pay. Read more
Non-recourse invoice factoring benefited a temporary staffing agency client when Constar Plastics filed for Chapter 11 bankruptcy. The transfer of risk amounted to over $187,000.00 when Riviera Finance purchased invoices from the staffing company on a non-recourse basis, assuming the credit risk, and subsequent credit loss.
Often times, the value of non-recourse factoring is under estimated, but when extending trade credit to a customer there is a varying degree of credit risk. In this instance, the staffing agency’s customer, Constar Plastics lost a contract with Pepsico and eventually filed for bankruptcy. Read more
