No matter what industry you’re in or what type of company you own, covering payroll is one of the most important aspects of owning a business. Your employees are the core of your operations, so getting them paid is crucial to growth and success.
Payroll funding is a simple, straight-forward solution to not just paying employees, but getting them paid on time. Cash flow fluctuates when you own a business, so payroll financing is a solution to the times where cash is too low to get employees paid, but it’s important to understand what is payroll funding.
What is Payroll Financing?
Payroll financing is a type funding that quickly gets business owners cash to pay employees on time. This is possible through a process called invoice factoring (or accounts receivable factoring). Invoice factoring is a great way to access capital without taking on debt, which is an important difference from a bank loan or line of credit.
How Does Payroll Financing Work?
The process of payroll funding with factoring is simple, which is why it’s used by many different types of businesses.
After you get set up with a factoring company the process goes as follows:
- Serve your customers as usual.
- Submit the invoices you want to be advanced for to the factoring company.
- The factoring company will advance you the invoice amount, minus a small percentage for the reserve.
- Your customer will pay the invoice in full.
- The factoring company will release the reserve, minus a small factoring fee.
Ready to Get Payroll Financing?
Secure the funding you need, when you need it the most.
Complete the form or call 855-322-8671 to start today.
How Much Does Payroll Funding Cost?
The cost of payroll funding is dependent on many different variables such as:
How much you are billing on a monthly basis
How much you plan to factor
The industry you are in (Staffing, Trucking, Manufacturing, etc.)
The creditworthiness of your customers
The advance for an invoice can range anywhere from 80% to 95% but we can get you a factoring quote, start the process and answer any questions.