Security guards work in a variety of places, including retail malls and stores, industrial settings, casinos, concert venues, and office buildings. In 2020, over one million people worked as security guards, compared with about 130,000 in law enforcement.
Because a security guard service company’s biggest asset is its employees, it can be challenging to qualify for a traditional bank loan or line of credit. That’s because most lenders prefer you to have access to assets that can be turned to cash quickly if you have trouble making payments on your loan.
When your customers pay 30, 60, or even 90 days after the work is completed, your business can experience gaps in cash flow. Not only can you miss monthly payments, but this can also make it difficult to provide adequate training for new guards, take on new and bigger contracts, or hire new employees as you scramble to meet your payroll obligations.
Invoice funding for security companies is a practical way to get the cash you need to grow your business.
Bank loans are the most common type of financing for many businesses. However, it can be difficult to qualify for a bank loan, especially if you’re a relatively new business with scant credit history. A business loan can improve your working capital but often does not provide a sustainable solution – especially if you grow quickly.
Factoring for security guard companies is not a loan. It is not paid back in monthly installments, and many security guard companies qualify.
In the past, factoring was largely misunderstood. Business bank loans and lines of credit were the traditional and accepted forms of financing, along with credit cards. Each of these different funding options has pros and cons to consider.
Costs for a new or growing security guard business can be significant. You may need to purchase equipment and inventory, pay employees, and keep up with rent, taxes, and marketing. You may consider taking out a business loan.
A line of credit (LOC) is a lot like a credit card. You can borrow/withdraw money up to a certain maximum amount determined by your financial institution. You can cover day-to-day expenses and pay back your debt, only to borrow again when needed.
Like all forms of funding, business credit cards must be used wisely, or things can go sideways very quickly.
Invoice factoring is not a loan. The application process is quick. There is no repayment obligation, no high interest rates, and no debt to record on your company’s balance sheet. Plus, many more companies will qualify.
Choosing a factoring partner is a lot like choosing any lender. It pays to do your homework. There are also several questions to ask prior to starting the application process:
Most factoring companies work with most industries, but not all. Some factors specialize in only a few industries.
FundThrough works with security guard companies.
Advance rates can range from 60% to 100%, depending on the factoring company and sometimes the industry.
FundThrough advances 100% of the invoice amount, less a fee.
A factoring company should be able to provide what factoring fees it charges upfront. But some companies may make it difficult to determine the total costs of using their service. FundThrough offers transparent pricing so you know prior to signing an agreement.
FundThrough pricing – 100% advance rates minus a flat fee. One up front price.
A minimum is the amount you must factor every period (month, each quarter or every year). Some factoring companies offer plans that require minimums, while others do not.
FundThrough doesn’t require minimums. Only fund when you need to.
Cash flow is the number one problem for most start-ups and small security guard businesses, especially if they’re growing. This is also true for security guard companies. Invoice factoring companies typically consider several situations before offering you an advance.
Factoring invoices is a sound financial strategy if you—
FundThrough takes the legwork out of accounts receivables financing. It’s fully automated platform is easy to navigate, it’s fee structure is transparent and a customer service rep is there when you have questions. Find out what FundThrough’s clients have to say, and start factoring your invoices today.