What is Payroll or Staffing Factoring?
Staffing factoring or payroll factoring is a form of accounts receivable or invoice finance that is used for temporary staffing companies to grow their business. This is nothing new, but one of the primary forms of funding used for temporary staffing companies to grow and make sure each week they are able to fund payroll
Why use a staffing factoring company?
Staffing factoring enables you to receive up to 95% of the value of your outstanding invoices within hours of creation instead of waiting on payment terms with your customers, whatever that may be 30, 60 or 90 days.
This enables temporary or contract staffing companies to grow their book of business very rapidly and keep all their workers paid on time.
The remaining 5% is paid back to you once your client pays less the staffing factoring fee.
How much does payroll factoring cost?
Cost largely depends on how long it takes for your customers to pay. But payroll funding can cost as little as less than 0.5% or up to 3 or 4% if your customers really drag out payment. An average (depending on the payroll funding company you chose) will usually cost between 1-3% of the total invoice value. When looking at cost of payroll factoring, a business needs to evaluate the of restricted growth due to limited working capital against the potential upside of having the capital to grow at the pace you can place workers in the field while paying a small fee to do so. With the margins in the industry where they are, it makes a lot of sense to be able to grow by using payroll factoring and make sure your workers are always paid no matter how fast you grow.
How do I start receiving factoring for my payroll and get funded?
To get setup with a payroll funding company it generally takes a few main steps.
Once you are set up, each week you just need to submit the invoices and corresponding time cards to your staffing factoring company and you will receive funding within 24 hours!
If you are doing business in the U.S or Canada, Sign up now at www.merituscapital.com/apply