Payroll Factoring Services

Regardless of whether or not a business’s cash flow is in a good place, it still has to pay its staff. What do you do when payday is approaching, you have plenty of invoices awaiting payment, and you are worried that your current cash flow won’t cover the salary bill? Payroll factoring is an easy and effective way to bridge that gap and get your team paid on time.

There are several benefits to payroll factoring, including:

Payroll factoring frees up funds tied up in your accounts receivables quickly, allowing businesses to meet their payroll and other running expenses on time. All you have to do is sell your receivable invoices to a factoring company, which will then advance a large percentage of the total face value to you and collect the outstanding amounts from your clients as they fall due. Once payment is collected, and the factoring service has taken its fee, the remainder will be paid to you.

The only thing less flexible than cash flow restrictions are the terms involved with acquiring and repaying a loan from a traditional banking institution. There are several hoops to jump through, and you still may not get the loan you seek, leaving you back where you started. If you do get the loan approved, you are saddled with debt that you will need to repay at a specific rate over a fixed period.

A payroll factoring service is exactly the opposite. You get flexible terms and options that suit your needs and capacities and don’t incur any debt.

Scalable Funding as Your Payroll Grows

As businesses expand, so do their payroll obligations. Hiring more employees means higher payroll invoices, and relying on traditional financing like bank loans or lines of credit may not provide the flexibility needed to cover payroll as demands fluctuate. Payroll factoring allows businesses to use payroll funding without accumulating debt, making it a smart financing option for companies experiencing growth.

With invoice factoring, a business sells its accounts receivable to a payroll factoring company and receives an advance rate of 80-95% of the invoice amount. The factoring company then collects outstanding invoices, deducts its factoring fees, and provides the remaining balance to the business. This ensures immediate cash flow to meet payroll, even if clients take days to pay.

For staffing companies and staffing agencies, where payment cycles can be unpredictable, factoring for staffing provides a steady funding source. Many factoring companies offer specialized factoring for the staffing industry, helping businesses scale without the delays of traditional financing. Unlike loans or lines of credit, factoring solutions grow with your business, ensuring reliable payroll funding as workforce demands increase.

A payroll factoring service makes it easier to process your monthly payroll by ensuring that the funds are available and helping you to handle payments and payroll-related expenses with less fuss and stress.