IT & Tech Staffing Factoring & Invoice Funding | Business Factors
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IT & Tech Staffing Factoring

IT & tech staffing factoring is a short-term financing solution wherein a third party buys a staffing agency’s accounts receivables at a small discount. The agency receives an advance for the unpaid invoices and obtains cash that they can use to:
  • Finance payroll and overhead expenses.
  • Fund business expansion plans.
  • Hire additional contract workers for clients with urgent staffing needs.

What Is IT & Tech Staffing Factoring?

All businesses need cash to stay operational. You need working capital to pay for employees’ salaries, suppliers, utilities, and other day-to-day expenses. For companies such as IT & tech staffing agencies, cash flows often depend on your customers’ payment schedules. The problem comes in when the cash runs out before the earliest invoice is due.

Staffing factoring for tech companies helps prevent these situations. Factoring fills the gap created by a high cash outflow rate and a low cash inflow rate. By allowing a third-party – the factoring company, also known as the factor – to buy your accounts receivables, you can solve your cash shortage problem and prevent other issues that could stem from such a situation.

Factors can buy a few invoices at a time (known as spot factoring) or claim all of your invoices (known as full-turn factoring). They also take responsibility for charging your clients and ensuring that they pay their invoices. As long as you have a non-recourse contract, you don’t suffer significant financial consequences if a client doesn’t pay.

One of the best benefits of IT & tech staffing factoring is that you can monetize your invoices as early as two to three days. Unfortunately, many service agreements give customers 30 days or more (from the day they receive their invoices) to pay their balances in full. While a long payment window promotes goodwill, it can put staffing agencies with limited working capital in a tight spot. Fortunately, staffing factoring for tech companies can provide immediate financing when you need it most.

How Does Staffing Factoring for IT & Tech Work?

Staffing factoring for tech companies involves four steps:

  1. Provide the factor with a copy of the unpaid invoice you sent to your client.
  2. The factor will verify if the invoice is valid and conduct a credit check on your client.
  3. If everything checks out, the factor pays you your advance.
  4. Once your client pays the invoice, the factor will deduct their fees and return the rest of the reserve or deposit to you.

How Can IT & Tech Staffing Factoring Help?

Whenever cash flow becomes a problem for your business, staffing factoring for tech companies can give you immediate access to working capital. In addition, the staffing industry has a higher advance rate (up to 96 percent of the invoice face value) for staffing factoring compared to others (can be as low as 60 percent of the invoice face value), so you shouldn’t worry about receiving way less than what you’re originally owed.

Finally, staffing factoring for tech companies doesn’t require you to have an impressive credit history. It’s not your creditworthiness that is more important to the factoring company, but your client’s. If you do not qualify for traditional short-term loans because of your credit history, seek out IT & tech staffing factoring instead.

Advantages of Staffing Factoring for IT & Tech Staffing Companies

To summarize, staffing businesses can enjoy these benefits thanks to staffing factoring:

  • Secure an advance on your invoices two to three days.
  • Obtain working capital even if your business has had a problematic credit history.
  • Enjoy financial freedom to explore growth opportunities (i.e., hire professionals like software engineers, nurses, medical technicians, professors, etc.)
  • Attract quality employees by offering competitive salaries.
  • Have the ability to hire extra workers when clients have urgent staffing needs.
  • Have the ability to accept new clients and hire workers for them while ensuring that you can make payroll for all current employees on time.

How Much Does It Cost?

The cost of staffing factoring for IT & tech companies is reflected on the discount rate or the service charge for using the Factoring companies determine the discount rate based on things like:

  • The number of invoices you factored
  • The total amount of the factored invoices
  • Your client’s creditworthiness
  • Your client’s history of invoice payments (whether they tend to pay early or very late)
  • The industry you serve

Factors will also set aside a reserve, which is a small percentage of the total invoice and serves as the deposit. You can get this money back minus the discount rate after your clients pay their debts.

You will receive the advance of your accounts receivables within two to three days of getting approved for staffing factoring. Here at Business Factors, the advance rates can be up to 96 percent of an invoice.

Here’s an example of how staffing factoring is going to cost you:

  • Invoice amount: $10,000
  • Advance rate: 90% or $9,000
  • Reserve: 10%, or $1,000
  • Discount rate: 2.19%, or $219 every 30 days
  • Type of arrangement: Non-recourse

In this scenario, you will get an advance of $9,000 from the factoring company for your $10,000 invoice. Since you agreed on a 2.19 percent discount, you’ll pay the factor $219 per month until your client settles the invoice. So if they pay after two months, the factoring company gets to keep $438 from the reserve and forward the remaining $562 to you. Since the contract is non-recourse, you won’t have to pay a fine if your client doesn’t pay their debt.

Alternatives to Factoring

Suppose you want to explore other financing options besides staffing factoring. In that case, you can check other working capital loans or merchant cash advance (MCA) options, like cash flow loans, asset-based financing, and revenue-based loans, to name a few. Business Factors offers these types of financing, and we can advise you on what to apply for based on your needs. You can inquire about these loans and request a quote to get started.

Why Choose Business Factors for IT & Tech Staffing Factoring?

Business Factors can give you the best experience in staffing factoring. As a factoring and working capital resource since 1991, we have helped businesses achieve financial stability and success by providing various working capital loans.

We offer the following benefits:

  • 24/7 availability
  • Easy application with zero upfront costs
  • A full range of financial services
  • Non-recourse factoring (we absorb the losses if account debtors don’t pay)
  • Low fees and competitive advance rates
  • Confidentiality agreement
  • Factoring in as quick as two to three days
  • Friendly and attentive customer service


When your staffing contracts allow your clients to settle their invoices in 30 to 90 days, but you have many bills and salaries to pay every two to four weeks, your business may run out of cash. IT & Tech staffing factoring is a sound financing solution in this situation because it brings working capital into your business without going through the hoops of a bank loan application. In addition, you don’t need to worry about having a low credit score because factoring companies will look at your clients’ creditworthiness, not yours. You can also get the advance on your accounts receivables in two to three days instead of the usual 30+ days.

Staffing factoring for tech companies offers a high advance rate – and if you choose Business Factors, you could get as high as 96 percent of your accounts receivables. We offer competitively low discount rates and zero fees, so the deductions on the total face value of your invoices will be minimal. Immediate financing at minimal cost is what you can expect from Business Factors.

Through IT & Tech staffing factoring, your staffing agency can monetize pending invoices and get much-needed cash to keep business running smoothly. Contact Business Factors to learn more about staffing factoring.

Representatives are available 24/7 to answer any questions you may have on accounts receivables factoring. Call us today at (800) 672-3844.