Why Is Debtor Finance Suited To Temporary Labour Hire Businesses?
Labour hire is the term applied (especially in Australia) to provision of outsourced skilled and unskilled blue-collar workers hired for short- or long-term positions (see wiki).
So why is Debtor Finance suited to labour hire?
Labour hire companies are usually required to pay staff and contractors well before they receive payment from their clients. This can put pressure on cash flow. How can you pay your staff (contractors) consistently if you’re not getting paid for extended amounts of time? Debtor finance solves this problem.
Debtor Finance is really the front runner in a working capital solution for most companies within this industry – where ‘contractor’ trading terms are only 5-10 working days but customer payment terms are usually 30+ days.
Further to this, labour hire is a relatively low margin but high turnover business. This means that if cash flow timing does not exactly match (which it almost never does), large amounts of working capital are required. Debtor finance is very useful in these types of businesses, due to its low cost and (usually) non-collateral based requirements. If you had to put property security up for every dollar of finance you needed, you would run out of working capital very quickly.
With DebtorFinance, after submitting your invoice, you can receive funding ( up to 90% of your invoice) within 24 hours, rather than waiting weeks (lets face it sometimes months) for the client to pay. Eliminating stress on your business instantly.
