Payroll factoring is a type of staffing agency finance in which staffing agencies sell their accounts receivable invoices for a fee to obtain immediate cash in the amount of the invoice. Your clients then pay the factor directly.
This arrangement provides your staffing firm with instantaneous working capital you can use to operate and grow your business instead of waiting the traditional 30, 45 or even 60 days for payment.
Payroll factoring provides the necessary cash flow in an industry in which you often need to pay your employees and vendors weekly while waiting for client payment on a much longer timeline.
This working capital can be used for expenses such as office lease payments, expansion, inventory, employee wages and more. It is a steady flow of income helping bridge the gap between revenue and expenses.
Payroll factoring is typically a more flexible form of staffing agency finance than bank funding, which often takes much more time and money and carries a higher risk.
Therefore, if you need additional working capital one month, say, to cover your workers’ compensation payments or open a new location, a factor is more likely to grant your request than a traditional bank.
For information on how TemPay can provide payroll factoring services that provide you with working capital, contact us here or at (866) 683-6729. Our Resources section offers plenty of information on our many services and how our system works with our partners. You may also apply directly for credit to get started with TemPay by visiting this page.