In payroll factoring, you sell your accounts receivable invoices to the factor for immediate cash, and your clients then pay the factor.
This is a tremendous benefit in an industry in which employees and vendors are often paid weekly but staffing firm customers can take 30, 45 or even 60 days to pay, creating a cash flow gap.
- Applying for payroll factoring is quick and easy.
- Applying doesn’t require the lengthy business or financial reviews of traditional financing.
- Payroll factors can advance 90 percent or more of an invoice’s total, providing you with maximum funding without the hassle of paying interest on the full amount of a loan, even if you don’t use all the money.
Payroll factoring is also a more flexible form of staffing agency finance, and factors, who know and understand the staffing industry are more likely to consider overadvancing if you need extra cash to cover your workers’ compensation payment or to help with overhead.
Payroll factors assist companies in various staffing industries, including light industrial, construction, medical, clerical, food service, IT, banking, advertising, accounting and more. It is particularly helpful for those who are starting a staffing agency, as this method provides immediate funding without having to wait for customer payments.
Payroll factors often also provide full-service funding options, in which the factor pays your employees, files and pays your payroll taxes, invoices your customers, and collects and follows up on delinquent accounts.
For information on TemPay and its payroll factoring services, visit www.tempay.com or call (866) 683-6729.