Professional services
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Funding for marketing and creative agencies
Agencies have two cash flows that look like one: fees for work, and media dollars that pass through on the way to ad platforms. Financing the second as if it were the first is the classic agency mistake, and lenders make it too.
How the money moves
Retainer clients pay monthly, often net-30 to net-60 from invoice. Project clients pay deposits and milestone payments. Media spend is charged to platforms daily, frequently on the agency’s card or credit line, and rebilled to clients at cost plus a fee, collected weeks later. Payroll is the dominant cost and is paid biweekly regardless. The gap is a month or two of payroll plus whatever media the agency has fronted.
Two worked scenarios
Scenario A: $120,000 of monthly invoices on net-45, half of it media pass-through
Invoice financing on the $60,000 fee portion (hypothetical 2% per 30 days, 80% advance) advances about $48,000 and costs roughly $1,800 per month if clients pay on day 45. Media pass-through belongs on a card paid in full or a line sized to one month of media, with clients on prepaid media terms wherever possible; financing it at factor rates destroys the margin on the fee.
Scenario B: a $70,000 advance sized on total deposits
A hypothetical agency with $250,000 of monthly deposits (most of it media pass-through) is offered $70,000 at a hypothetical 1.28 factor over 30 weeks: $21,000 in cost and $2,987 a week, drawn from an account that is mostly clients’ ad money in transit. The deposits are real; the margin behind them is not.
Hypothetical numbers, labeled as illustrations; not quotes.
What fits what
| Need | Usually fits | Usually doesn’t |
|---|---|---|
| Fee receivables | Invoice financing; line | Advance |
| Media pass-through | Prepaid media terms; card paid in full; media line | Advance |
| Growth hires | Line sized to salary until billable | Advance |
| Software, equipment, studio | Equipment financing; term loan | Advance |
Questions specific to this business
- Which clients will move to prepaid or on-delivery media billing?
- Does the factoring provider distinguish fee invoices from pass-through invoices?
- What is our concentration: does one client exceed 30% of billing?
- Are contractors or employees the larger cost, and does that change payroll-funding options?
Watch for. Underwriters sizing an advance on gross deposits will offer more than your fee margin can service.
What Fast Mula is and isn't. Fast Mula helps you compare business-funding structures and submit one inquiry. Nothing on this site is an offer, approval, guaranteed rate, or guaranteed timeline. Any funding depends on a provider's own review, and terms vary by state.
Common questions
Can an agency factor invoices that include media?
Often the provider will advance only against the fee portion or will treat pass-through invoices differently. Separating media from fees on invoices helps.
Related
Payroll funding
Payroll against net-60.
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A similar cash cycle.
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Gig workers & the self-employed
Making platform income legible.
Marketing agencies? See what fits
Tell us about the timing, the need, and the numbers.