Payroll funded ahead of the cycle through advances against client invoices.
Staffing firms, temp, contract IT, healthcare placement, light industrial, invoice clients on net-30 to net-60 terms but settle with their workforce weekly or bi-weekly. The gap between payroll and AR is the primary constraint on growth. Factoring addresses it.
- 01
Payroll operates on a weekly cycle
Contract and W-2 staff are compensated on the agency's payroll schedule, typically weekly. Payroll obligations are fixed regardless of when client invoices are collected.
- 02
Client payment terms run 30 to 60 days
Enterprise and government clients set payment terms at 30, 45, or 60 days. The agency carries 4 to 8 weeks of float between payroll disbursement and invoice collection on each active assignment.
- 03
New contracts increase working capital requirements before revenue arrives
A new 50-person contract adds 50 weekly payroll obligations before the first invoice on that contract is collected. Each new assignment extends the float proportionally.
Staffing agencies placing $200K to $20M+ annually in contract or temp labor across IT, healthcare, light industrial, administrative or skilled trades.
- ·AR aging report
- ·Sample client invoices and contracts
- ·Payroll register (most recent 2 cycles)
- ·Workers' comp certificate of insurance
- 01Advance against approved client invoices once they're approved, so payroll is funded ahead of the next cycle.
- 02Payroll-funding option that wires directly to the agency's payroll provider on the run date.
- 03Recourse structures, with the desk tracking client payment.
- Funding speedOn cut invoices
- AdvanceSubstantial against face value
- Payroll fundingAvailable
- Industries servedIT, healthcare, light industrial, admin, trades
- StructureRecourse with payment monitoring
- ConcentrationDiscussed case-by-case