Staffing agencies
Weekly payroll against net-60 clients.
Guide
Payroll funding: the right tool depends on why payroll is short
Missing payroll is the one thing a business cannot do twice. "Payroll funding" means different products depending on why the money is not there yet: a client who pays in 45 days, a seasonal dip, or a business that is simply not profitable. Only the first two are financing problems.
First: timing gap or profitability problem?
If you have invoiced the work and the money is coming, you have a timing gap. If payroll exceeds what the work will ever bring in, financing only delays the reckoning and adds cost. Be honest about which one it is; every product below assumes the first.
Products called "payroll funding"
| Product | Who it fits | How it works | Cost basis |
|---|---|---|---|
| Payroll funding for staffing agencies | Staffing and contract-labor firms | Provider funds payroll (often runs it) and collects your client invoices | Percentage of invoices, often tiered |
| Invoice factoring | Any B2B business with creditworthy customers | Advance against specific invoices | Percentage per period outstanding |
| Line of credit | Businesses with a track record | Draw for payroll, repay when paid | Interest on drawn balance |
| Short-term advance | Urgent one-time gap | Lump sum, fixed payback | Factor rate; highest cost |
Ordinary payroll for a business without invoices (a restaurant, a salon) has no receivable to finance; a line or a short advance are the only options, and only for a genuine one-off gap.
Planning repayment
- Map each payroll date against expected client payments for the next 90 days.
- Fund only the payrolls that fall before the payments, not the whole quarter.
- With factoring, remember the reserve (the unadvanced portion) arrives only when the client pays.
- Payroll taxes are not optional; do not let a funding shortfall become a tax problem.
Watch for
- Advances marketed as payroll funding that debit daily from the account payroll runs through.
- Factoring contracts with minimums above your invoice volume.
- Concentration limits if one client dominates your billing.
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 I get a loan just to make payroll?
Yes, a line of credit or a short-term product can cover a payroll gap. Lenders will ask why; a signed contract or outstanding invoices make the answer easy.
Is payroll funding only for staffing agencies?
The specialized product is. The underlying tools (factoring, lines) work for any B2B business with a timing gap.
Related
See which options fit your numbers
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