Payroll funding is a specialized form of invoice factoring designed for businesses that must pay employees before receiving payment from clients. It's especially critical for staffing agencies, temp agencies, and professional services firms where payroll is the biggest expense.
The Payroll Timing Problem
If you run a staffing agency, you know this challenge well: Your workers expect to be paid weekly or bi-weekly. But your clients pay on Net 30, Net 45, or even Net 60 terms. This creates a dangerous gap that can grow with every new placement.
- Workers expect consistent, on-time payment
- Payroll taxes are due regardless of collections
- Missing payroll destroys worker trust and retention
- Growth actually worsens cash flow (more placements = more payroll before payment)
- Traditional loans often don't scale fast enough
How Payroll Funding Works
Payroll funding through invoice factoring solves the timing mismatch:
- 1You place workers at client sites and track their hours
- 2You bill your clients as usual (weekly or upon timesheet approval)
- 3You submit those invoices to your factoring company
- 4You receive 80-95% of the invoice value within 24 hours
- 5You use the funds to make payroll and cover payroll taxes
- 6When clients pay, you receive the balance minus factoring fees
Never miss payroll again
Check your eligibility for payroll funding.
Payroll Funding Rates
Payroll funding typically costs 2-6% of the invoice value. Rates depend on your client creditworthiness, volume, and payment terms. High-volume staffing agencies with strong clients often qualify for rates at the lower end of that range.
Benefits of Payroll Funding
- Meet payroll every week without fail
- Cover payroll taxes when due
- Take on new clients and expand without cash flow fear
- No debt - you're selling invoices, not borrowing
- Approval based on client credit, not your credit score
- Funding grows automatically as you add more placements
Who Uses Payroll Funding?
- Staffing agencies (light industrial, clerical, administrative)
- Healthcare staffing firms (nurses, CNAs, medical techs)
- IT staffing and consulting firms
- Security guard services
- Janitorial and cleaning services
- Any service business with significant labor costs
Getting Started
To qualify for payroll funding, you typically need invoices to creditworthy business clients and a consistent billing cycle. Bad personal credit usually isn't a barrier - what matters is your clients' ability to pay.
At Factoring Express, we specialize in payroll funding for staffing agencies. With same-day funding and rates starting at 2%, we help you focus on growing your business instead of chasing payments. Call 855-767-7771 or check your eligibility online.