My company loans money to staffing companies so they can make weekly payroll since cash comes in 5 to 6 weeks after the temp employees and the taxes have been paid. We use the staffing company's invoices as collateral for the loan and look and the invoiced company's credit rating to set credit limits. It seem's that past credit history may be of little value after 1/1/00. How will we quickly establish a new credit limit?

-- Steven Elias (Elias@flexiblefunding.com), August 12, 1999

Answers

Steven,

Interesting! One of my sons is working for a temp agency this summer, and I had no idea that this kind of financing was going on behind the scenes. It makes you wonder how many other nearly-invisible components of our economy are exposed to the Y2K problem...

With regard to your question ... I don't know the answer. I think there may be a lot more temp work in the early part of next year, as full-time employees are laid off, and as companies staff up in "emergency mode" with clerical/admin people to unravel some of their Y2K bugs. And I think that the temp people are likely to be more cautious about prompt payment than they normally would be...

Ed

-- Ed Yourdon (HumptyDumptyY2K@yourdon.com), August 12, 1999.

From: Y2K, ` la Carte by Dancr near Monterey, California

It occurs to me that now would be a good time for me to obtain, laminate, and store in a few safe places copies of my credit record, and to encourge my neighbors to do the same. None of us has the foggiest notion of how credit worthy the others are.

-- Dancr (addy.available@my.webpage), September 06, 1999.