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.

How Home Health Care Factoring Can Help Your Agency

Starting up a home health care agency is difficult when your agency lacks ongoing funding. For even an established home health care agency, waiting for payments from state agencies such as Medicaid can cause your home health care business to miss important payment deadlines for obligations such as payroll and taxes. Most businesses need some sort of platform to maintain or grow the company – this is where home health care factoring comes into play.

Home health care factoring can help a company both immediately improve its financial situation and prepare for continued success in the future on a few different levels: Home Health Care Factoring and Cash Flow

      1. Through home health care factoring, your accounts receivables are purchased so that you can meet payroll deadlines, taxes, and vendor invoices. Your company will benefit because:
      2. Small business that apply for bank financing are too often turned down by large banks, so applying for such loans can hinder the process of obtaining cash if you spend time waiting for an approval, only to be denied funds.
      3. Credit unions, community development financial institutions (CDFIs), micro-lenders, and accounts receivable factoring firms are much more likely to approve small businesses for financing.
      4. Once a business confirms the completion of home health care services, funds can be transferred to an account within hours.

        Click here to read the more ways that home health care factoring can benefit your business.

        Home Healthcare has a Banner Month

        Our home healthcare factoring clientele should take pride. The industry has contributed a whopping 10 percent of an estimated 69,000 new jobs added to the U.S. workforce this past May. Though (according to this jobs report) the total number of added jobs landed well below most economists’ forecasts, healthcare continues to grow.

        According to Vicki Hoak of the Pennsylvania Homecare Association (whose website informed this report), “This demonstrates what we in the homecare industry have known for years. Not only is homecare clinically-advanced, cost-effective and patient-preferred, it is also a job creator and an economic force to be reckoned with.”

        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.

        Home Healthcare Factoring: The Right Funding Solution for Your Home Health Care Agency

        Instead of waiting weeks or months to receive payments from Medicaid, Medicare, insurance companies and/or private consumers, would your home health care agency rather have your cash immediately? Did a bank recently turn down your business loan application? Are your home health care receivables available to be collateralized?

        If you answered ‘yes’ to one or all of the questions above, then home health care agency invoice financing is by far the best funding option for your business. Allow me to elaborate…

        Home health care invoice funding is the conversion of accounts receivable into cash by selling outstanding invoices to a factoring firm. Home healthcare agency financing is a viable financial solution that gives companies immediate cash to manage operations more efficiently. Home health care care agency owners can then use liquid capital to make payroll, pay taxes and meet other recurring financial obligations.

        Click here for some additional key concepts about home healthcare agency invoice funding.

        Health Care Staffing Factoring Helps Business Owners Expand Agencies

        Health care staffing factoring is beneficial for growing agencies struggling to make payroll while their clients (medical providers) take weeks or months to pay for their services. Oftentimes, these agencies can’t qualify for traditional financing because banks look at a company’s past-aka: a profitable operating history-in order to extend credit. However, medical staffing funding companies are more concerned with the agency’s future-aka: its growing accounts receivable-in order to extend credit. Let’s take a look at how one healthcare staffing agency used invoice factoring to improve its cash flow.

        Slow Payments Hinder an Agency’s Growth
        A new healthcare staffing agency was successfully staffing LPNs and CNAs at a handful of local hospitals. Since the company’s inception six months ago, it had gained an outstanding reputation for placing the most qualified and hard-working nurses. Even though the healthcare staffing agency was a popular choice, the owner kept turning down new clients because he was struggling to make payroll and pay taxes. Simply put, payments coming in were much slower than the agency owner had originally anticipated, and his cash flow was out of sorts.

        Click here to find out how the health care staffing agency owner used invoice funding to help stabilize his cash flow.

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