Fund weekly payroll while your clients pay on net-30.

The staffing industry has a structural cash flow problem built into its business model. Your product is people's time. Those people expect to be paid every week — or every two weeks at most. Your clients, however, pay invoices on net-30 to net-60 terms. The math is simple and relentless: if you place 50 temps at an average bill rate of $25/hour, your weekly payroll obligation is roughly $50K. But that $50K in client revenue won't arrive for 4–8 weeks.

Every new placement amplifies the gap. Winning a large client contract is exciting — and immediately cash-negative. A staffing agency that grows from $2M to $5M in annual revenue doesn't just need more clients; it needs $200K–$400K more in working capital to bridge the new payroll obligations against the larger receivables balance.

Banks often struggle to underwrite staffing companies because the business model looks backward through a traditional lens: high payroll relative to revenue, minimal hard assets, and customer concentration in a few major accounts. But the underlying business is sound — the receivables are real, the contracts are in place, and the clients are paying. They're just paying later than your employees.

Invoice factoring for staffing is straightforward in concept: you invoice your client for hours worked, then sell that invoice to a factoring provider at a discount. You receive 80–90% of the invoice value immediately (the "advance"), and the remaining balance (minus the factoring fee) when the client pays.

The payroll funding cycle

For staffing companies, factoring creates a virtuous cycle: temps work Monday through Friday, you invoice the client, the factor advances cash, and you fund payroll. Next week, repeat. The factor collects from the client on normal payment terms. You never have to choose between payroll and growth.

Selective vs. full-ledger factoring

Some staffing companies factor every invoice (full-ledger). Others factor selectively — only invoices from clients with longer payment terms or larger balances. The right approach depends on your cash flow, your client mix, and how much of your working capital gap factoring needs to cover.

Growing beyond factoring

As staffing agencies scale — crossing $5M, $10M, or $20M in revenue — the economics of factoring every invoice can compress margins. At that stage, many agencies benefit from transitioning to a revolving line of credit or an asset-based lending facility that uses receivables as collateral but at a lower effective cost than invoice-by-invoice factoring. We help agencies evaluate when and how to make that transition.