Flexible Funding for Staffing Companies

Payroll funding is the act of selling your invoices to a payroll finance company to receive immediate access to cash. This financing helps staffing agencies meet payroll expenses without waiting to collect from customers.

The factoring company buys the unpaid invoice from your customer to advance the cash to your bank account the same day. Once your customer pays the funding company at the end of the payment term, you receive the rest of the invoice amount, minus a small fee. This quick access to capital helps sustain business growth.

As a staffing company, making payroll is one of the most important jobs. Without payroll processing, you can lose employees and risk going out of business. Having access to your working capital is extremely important as a staffing agency business owner.

When you have a source of funding, you can pay your employees immediately, instead of waiting to collect on invoices. While there are other financing options like banks, many small businesses do not qualify as they do not have good enough credit or assets to borrow against collateral. This is why invoice financing is the payroll funding solution your staffing agency needs.

Payroll factoring typically is a process businesses choose to turn their outstanding invoices into immediate cash to make payrolls in the pay period. Factoring companies like Porter Capital excel at providing easy financing solutions to businesses. Businesses can receive easy funds without having to take on additional debt by using bank loans to fulfill their financial obligations. The best part of opting for payroll invoice factoring is that it uses outstanding invoices, as collateral businesses need to keep their cash flow moving. Porter Capital, for example, does not put businesses through hectic procedures of credit checks. The factoring company is only interested in the customer’s creditworthiness.

In a nutshell, payroll invoice factoring is a relatively easier financing option for businesses struggling to pay their employees on time. It helps companies keep their cash flow afloat and retain employees. In addition, it strengthens the relationship of businesses with their employees.

1. Reliable Cash Flow: Payroll factoring offers advances on your billed or unbilled accounts receivables.
2. Competitive: With factoring, staffing companies can get up to 97% of the total invoice value to grow their business.
3. Flexible: Factoring is more flexible than traditional financing. Look for a provider that offers both recourse and non-recourse options.
4. Value of Time: It is a good option to even cash flow and can offer eligibility on invoices up to 120 days
5. Working Capital: Look for a lender that offers term loans up to $500,000
6. Powerful: Be sure to choose an established provider that can offer lines of credit of up to $15 million
7. Freedom: It’s important to choose a partner that won’t lock you into any restrictive financial covenants that could hamper your growth in the long term
8. Longevity: Look for a lender that has an established track record. Porter Capital has been in business for more than 25 years
9. Leverage: Take the long view with your business. Factoring can fund additional growth by leveraging the A/R of target companies to fund acquisitions
10. Price: We know that price is important, so Porter Capital offers the most competitive rates in the industry.

You’re able to acquire more clients for your staffing agency when you work with an invoice financing company. Outstanding invoices won’t get in the way of your growth as you will have access to cash flow, and you can invest more in marketing efforts to attract more clients.

When you work with an invoice financing company, you’re acquiring new debt, and no loan needs to be paid off. You’re simply getting access to your working capital so you can stay on top of your payroll expense and grow your business.

Protect Personal Funds

This is no doubt one of the potential benefits of choosing invoice factoring for staffing agencies. It protects the personal funds of business owners, especially when they make payrolls. Using personal funds including saving accounts, retirement accounts, and family accounts is very common for business owners for making payrolls. Many business owners make this mistake to avoid the IRS problem, bankruptcy, and lawsuits that they may face if they fail to pay employees on time. Luckily, invoice factoring is a flexible financing solution that can help entrepreneurs prevent these situations. With this ultimate solution, entrepreneurs do not need to resort to drastic measures.

Prevents Layoffs

There is no denying that layoffs are one of those things that all employers want to avoid, particularly when their business is in a growing phase, and they are availing new opportunities. Factoring invoices to a reliable firm like Porter Capital enables employers to retain their potential employees, especially when they need them. By making timely payroll, employers can make payments on time and keep up with the situation.

Decreases Expenses

Employers can accept up to 50% hit on heavy receivables to cover the amount of payroll. For the businesses that work with factoring companies; this cost of immediate cash would be incredibly less. Porter Capital, in this regard, charges only a small percentage of invoices of customers who agree to pay the immediate payment.

Reduces the Need for Additional Debts

Traditional business loans make another easy option for employers and business owners. However, these loans need to be paid within a certain time limit, and that too with interest. To make matter worse, many startups and small businesses do not have enough credit history when it comes to qualifying for loans. Unlike traditional loans, invoice factoring does not require sufficient capital and credit history. It only involves selling invoices. That is to say, there are no additional debts, drawn-out approvals, or interest payments as long as business owners factor their invoices.

Takes Care of Employees

It is not about only avoiding state or federal tax liabilities or avoiding lawsuits and IRS penalties. It is also not about just keeping your company or cash flow afloat. Whether you want to manage payrolls for a huge corporation or a small business, it is important to pay employees and workers on time. It is one of the vital strategies to retain potential employees. Invoice factoring is undeniably an excellent solution to keep your company’s cash flow running. It has become an integral part of businesses, which rely on seasonal cash flow and need a reliable source of finance to pay their employees. Invoice factoring is the right solution that enables businesses to bridge the gap between making checks for employees and collecting payments.

When working with an invoice financing company, the approval process is a lot quicker than with a traditional lender. A company like Porter Capital can approve you in as little as one business day, and you can start funding your invoices immediately, so you don’t need to cut into your agency’s resources to meet payroll.

1. Provide Services: The staffing company operates and provides services as usual based on the agreed-upon payment terms. Payroll can only be funded after hours have been worked to use payroll funding.
2. Billing Customers: The staffing agency invoices the customer like normal, but changes the “remit to” instructions. Once the staffing company has signed on with a financing company, the payment instructions change to pay the payroll funding company instead.
3. Sell the invoices: The staffing agency submits invoices to the payroll funding company. The staffing company receives the face value (usually around 90%) of the invoice the same day.
4. Collecting Payment: Once the payroll funding company has collected payment from the customer, the remaining invoice amount (minus a small fee) is released to the staffing agency.