There are several good reasons why janitorial services are thriving these days. The most common reason is that just about every place of business needs to be maintained and cleaned, but it doesn’t always make sense for a business to have its own cleaning staff. It’s too much trouble to hire janitors on a permanent basis, especially when the company also has to buy cleaning supplies and equipment as well.
But while there are good reasons for you to start a janitorial service, it may be difficult to maintain its growth when you’re experiencing cash flow issues. You need the cash to meet hire new workers, meet payroll, buy and maintain cleaning appliances, and buy cleaning supplies.
Without the cash flow, you may find yourself walking away from future contracts because you don’t have enough money to hire new workers. And what’s more, you may even have problems with your current contracts since you need to hire new workers for those who quit working for you.
If you’re having cash flow problems, then janitorial factoring services may be the answer to your situation:
Factoring services are very easy to get. The approval can come in just a single day, unlike bank loans that take such a long time. The approval for factoring services is also much more likely compared to bank loans. That’s because there’s no need for you to have excellent credit, and you don’t really need to put up any collateral for a loan. Setting up the factoring line takes only a week or so.
Factoring gives you your own money now, instead of having to wait. Your customers may take 30 days (or more) to pay you for the services your workers provide. But your daily and weekly expenses won’t wait at all. This causes cash flow problems that factoring solves easily.
What’s more, the cash advance you get is not a loan at all. It’s your own money, but you only get it in advance. This means that such arrangement won’t affect your credit.
The factor takes over the collection duties. It’s hard enough to hire sufficient numbers of janitors to meet the demand. So it’s convenient for you when the factor takes the responsibility of collecting the payment from your customers. You don’t have to hire staff for your own collection department.
The factor doesn’t tell you how to spend the financing you get. They don’t tell you if you should spend it on growth, new facilities, or hiring new workers. After all, it’s your You spend it on whatever you like.
In contrast, banks often insist that you spend the loan they provide in the manner they prescribe. That’s because it’s the bank’s money, and the bank wants to make sure you’re using the money properly so that you’ll be able to pay them back.
Banks loans may be good for your business, but it’s not always easy to get one. On the other hand, it’s easy enough to get factoring services whenever you need it, so that your company can grow and help many other companies with their cleaning requirements.
Factoring services can come in many different forms, but the essence remains the same for the most part. Instead of having to wait 30 days (or sometimes even more) to receive payment for the goods and services you’ve provided, you can get your money (or at least most of it) immediately. How quickly you get the money, the amount of money you get in advance, as well as the fees that the factoring company gets, will depend a lot on the particular situations unique to your industry. So if you are running a company that provides janitorial services, you need to look for janitorial factoring services.
While there are many factoring companies that offer financing to a wide range of industries, janitorial factoring services may be a better fit for your company because they already know details about the industry that other factoring companies don’t.
You don’t have to explain your need for working capital. You know why you need the money and why you need it quickly. But does your factoring provider know? If they don’t, then they may take too long to provide you with the money you need and the advance may not be sufficient for your needs. Having to explain that you need the money to buy cleaning supplies and to meet the weekly payroll is a chore that you’re spared from, when you deal with a factoring service that’s already familiar with the janitorial service industry.
Setting the factoring arrangement is a breeze. Every industry has its own way of doing things. But there can be some misunderstandings and screw-ups if the factoring service is unfamiliar with the business processes you work with. With an experienced factor, the setup is much quicker and more efficient. You don’t have to educate them, and they may even give you a tip or two on how to do things more efficiently.
Experienced factors have realistic expectations. Some factoring services don’t understand why some clients of yours insist on paying in 60 days or more instead of the usual 30 days. They may then penalize you for their “lateness” in paying when in fact it’s just business as usual for these people.
These factors can provide additional services. Janitorial services involve workers’ compensation. Generic factoring services have to be educated about this particular element of the janitorial industry. But janitorial factoring services not only know all about it—they may even know more about it than you do. You can then take advantage of their help when this particular issue comes up.
Moreover, the factor can also help you identify problematic clients. For example, if you have a new client then the factor can tell you about whether this new client pays their bills on time or not. You can also avoid new clients that already have a reputation of defaulting on their payments.
Working with a factoring service is a partnership, so make sure that the factor brings knowledge and experience to the table.
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