Funding for Staffing Agencies

March 21, 2018
Where do I get funding or financing for my staffing agency?

Most new staffing agencies will turn to an accounts receivable factoring or payroll funding company to fund or finance their staffing agency. They use this method as it allows a staffing agency to make sure they are always able to have their employees paid on time each payroll period even if their clients take 10-90 days to pay the staffing agency's invoices.

How does it work?

In a typical scenario, you submit your invoices and timecards for the prior week to the payroll funding company. Then a payroll funding company (often known as an invoice factoring company) will finance those invoices for a small discount so you are able to have 90-95% of the value of those invoices in your bank account the same or next day. This enables you to meet your obligations for that week while the rest is held in reserve until the client pays the invoices.

Once your client pays then you receive the rest of the value of your invoices less the small fee the payroll funding company will take for providing the service. This ranges from company to company based primarily on how long it takes your client to pay. Typical fees range from 1% to 3% of the invoice value.

Alternatives to payroll funding

Typically we see a few main ways staffing agency owners fund their business without the use of a payroll funding company:

Bank Line of Credit  

This can be a great form of financing but often growing staffing agencies find it hard to qualify for this type of financing with limited time in business and hard assets. If one does qualify, we see many rapidly growing agencies quickly outgrowing their bank line, leaving them looking for an alternative funding form.


Investors can bring a lot of value to a business through cash and insight into how to grow and run the business. But many entrepreneurs feel they need to sell a portion of their business in order to scale. With funding options out there, this isn’t the case.


Some staffing companies stipulate to their clients that payment needs to be made before each payroll period. If clients do agree then this can be one way to self-fund a staffing business. In many cases having these stipulations can make it hard to bring on new customers.

How to secure financing for your staffing agency?

Here are the basic 4 steps:

Quickly Sign Up - Just provide your full name, email and create a password.

Apply and Submit Info - Fill out and upload some basic information about your business.

Get Back to Work - Get back to doing your job while we get everything set up for you.

Accept and Submit for Funding - Sign our contract and upload invoices for verification and funding.

If you have any questions or want to discuss how Meritus can help provide funding for your staffing agency, contact us at 877-648-3709 or complete the contact form.


Leave your contact info and our representative will reach out to you or simply call us at (877) 648-3709

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