Security Firm - Case Study

Case Study: Team 13 Security Services


Team 13 Security Services is a private security company that provides security services to various clients, including residential and commercial properties, special events, and government entities. The company has been in operation for five years and has a staff of over 50 security guards.


One of the biggest challenges that Team 13 Security Services faces is cash flow management. The company has a steady stream of clients, but often the payment terms are long, and the company needs to pay its staff every two weeks. This creates a cash flow gap that makes it difficult for the company to meet its payroll obligations on time.


To solve this challenge, Team 13 Security Services decided to use receivable factoring. Receivable factoring is a financial tool that helps companies improve their cash flow by selling their outstanding invoices to a factoring company. The factoring company then provides an advance payment to the company, typically around 80% of the invoice value, and collects the payment from the client when the invoice is due.

The factoring company charges a fee for its services, typically between 1% to 5% of the invoice value, depending on the creditworthiness of the client, the terms of the invoice and the risk involved. The remaining amount is paid to the company once the factoring company collects the payment from the client.

Team 13 Security Services found a factoring company that specializes in working with small businesses and has experience in the security industry. The factoring company provided an advance payment of $40,000, based on outstanding invoices worth $50,000. The factoring company charged a fee of 2.9%, which is within the industry standard.


With the help of receivable factoring, Team 13 Security Services was able to meet its payroll obligations on time and improve its cash flow management. The factoring company handled the collections process, which reduced the administrative burden on Team 13 Security Services. The company was able to focus on its core business operations, such as providing quality security services to its clients, without worrying about cash flow issues.


Receivable factoring is an effective tool for small businesses like Team 13 Security Services that struggle with cash flow management. By selling outstanding invoices to a factoring company, companies can improve their cash flow, reduce administrative burden, and focus on growing their business.