Understanding Payroll Funding
Payroll funding is an alternative funding option where a company sells its unpaid account receivables in order to receive payment sooner – within hours instead of weeks or months. Many businesses like staffing companies rely on payroll funding to keep their employees paid on time, every time.
Funding payroll can be difficult without constant cash flow. Your clients may pay within 30 days, but your employees need to be paid sooner. If your business needs funding for payroll, an invoice factoring company could help.
Factor Finders is an alternative financial option that has been helping businesses fund their payroll for decades. If your business needs financing services, Factor Finders can help.
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How Does Payroll Funding Work?
Rather than waiting for clients to pay you, companies that specialize in financing for payroll will purchase your unpaid accounts receivable and advance your company the cash. This process is also known as payroll factoring. But how exactly does it work?
- Service your customers and submit invoices to the factoring company
- Your business receives a cash advance of up to 90% of the amount of the invoices
- Use that advance for staffing payroll funding or other business expenses
- Your customer submits payment to the factoring company
- Once the invoice is paid, the remaining balance is returned to you, minus a small factoring fee
Invoice Factoring: A Popular Funding Solution for Businesses
Invoice factoring can be an alternative financing method to fund your payroll. Financing is available within 24 hours of submitting your unpaid invoices, so you’ll always have the money for payroll and other business expenses.
Unlike bank lending, funding payroll with a factoring company creates zero debt. You don’t have to worry about paying back any loans or incurring high-interest rates.
The Benefits of Invoice Factoring to Fund Payroll
There’s a reason that invoice factoring is quickly becoming the preferred method of funding for staffing agencies and small business owners. The benefits of invoice factoring to fund your payroll reach beyond just maintaining a positive cash flow.
- No minimum volume requirements
- Payroll financing is available for startups
- The amount of available working capital grows with your business
- High advances up to 90%
- No long-term contracts
- Support for staffing companies, including payroll processing, bills, taxes, etc.
How Payroll Funding Can Help Your Business Grow
As a business owner, it’s your job to pay your employees in order to grow your company. Whether you have ten or 10,000 employees, invoice factoring can provide the optimal solution to your cash flow needs.
Payroll funding can be used to pay employee wages, worker’s compensation, benefits, and other payroll requirements. While you have the ability to pay your employees, you can also use the extra working capital for other business expenses, take on new clients, pay vendors, or whatever else you need to grow your company.
What to Expect with a Payroll Funding Companies
Virtually all businesses can benefit from access to steady working capital. Any company that extends credit to customers is eligible to factor accounts receivable. So whether it’s staffing payroll funding or growing your small business, working with payroll funding companies can be a viable financial option.
Every company is assigned a personal account manager to handle all account management duties, including customer credit approvals, collections, and billing, so you can focus on running your business.
In addition, by working with an invoice factoring company, you’ll have the ability to extend longer payment terms to clients and continue to grow your business.
Getting Approved for Payroll Funding
If your company has been denied traditional bank financing, don’t worry – you’ll likely be approved for payroll funding. Why? Credit checks are conducted on your customers – not your company or personal credit history.
If your customers have a decent credit history, you’re likely to be approved to finance your payroll through an invoice factoring company. This can be a fast-working capital option for small business payroll funding and for startups to pay employees without incurring more debt.
The following is NOT required for approval:
- Good personal credit rating
- Personal guarantees
- Profitable operating history
- Long operating history
About Factor Finders
Factor Finders is committed to helping your business access the funding it needs in order to grow. We take the time to listen to what you’re looking for and connect you with one of our many partners in the invoice factoring industry.
We’ve spent years cultivating relationships with the best funding companies so when you’re not sure which company is the best for your business, we do.
Slow paying clients, rapid growth periods, seasonal patterns, and other factors can pose cash flow challenges to your business. Factor Finders offers customized financing programs designed exclusively for your business’ needs. Our funding experts can help design the perfect payroll funding solution for your niche.
Save yourself the time and effort searching for the perfect payroll financing company for your business and let us do the work for you. This way, you can continue to focus on your business and we can do what we do best.
