Janitorial & Custodial Staffing Factoring | Business Factors
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Janitorial & Custodial Staffing Factoring

When seeking financial relief, janitorial and custodial staffing agencies may look to invoice factoring as a solution. Factoring is the sale of accounts receivable to third-party financing companies known as factors. By taking this route, agencies obtain available cashflow that they can use for various needs such as:
  • Disburse payroll on time.
  • Fund the company’s day-to-day operations without borrowing money from the bank.
  • Offer competitive salaries to attract employees and grow their staffing business.

Janitorial & custodial staffing factoring refers to the sale of invoices to third-party financing companies. Businesses who are owed payment will receive an advance on their pending invoices, providing much-needed cash flow for their operations. Through staffing factoring, janitorial & custodial companies can:

  • Monetize invoices and receive advances within two to three business days.
  • Obtain working capital to cover payroll and daily operating expenses.
  • Finance business expansion plans, like offering competitive salaries to attract top talent.

What Is Janitorial & Custodial Staffing Factoring?

One of the challenges of running a staffing company is managing cash flow when many of your clients are delayed with their payments. In most cases, the delays are sanctioned: staffing contracts today typically have a 30, 60, or 90-day pay cycle. Extending payment terms is a “good faith” concession staffing companies give to preferred clients so that they’re not instantly crippled if business is slow and they cannot settle their invoices early. Clients of janitorial and custodial staffing companies benefit from this arrangement the most – you may even agree with this approach.

However, your cash flow can take a hit from extended pay cycles. For example, if you incur a huge, unplanned expense in the middle of a pay cycle, your cash on hand could run out. This can be detrimental for your business if you end up spending funds initially allocated for payroll or overhead expenses. 

If your company is ever in this situation, consider getting financing through staffing factoring for janitorial companies and custodial agencies. It is one of the fastest ways to obtain working capital and save your business from financial trouble. You can get advances on your invoices (advance rate) in just two to three days from factoring companies (also called factors) who, in turn, keep a small percentage of the receivables (discount rate). 

Staffing factoring for custodial companies and janitorial services can be a temporary or permanent arrangement. Factors can also buy select invoices through spot factoring or assume all of your invoices through whole ledger or full-turn factoring.

How Does Staffing Factoring for Janitorial & Custodial Companies Work?

Securing staffing factoring for janitorial companies and custodial agencies is very simple. There are only four steps:

Step 1: Get in touch with a factoring company and provide them with copies of your clients’ unpaid invoices.

Step 2: The factor will verify the invoices and assess your clients’ credit ratings.

Step 3: The factor will send you an advance on your invoices in two to three business days. 

Step 4: Once your clients pay their invoices, the factor deducts its fees and sends the remainder of the payment to you.

How Can Janitorial & Custodial Staffing Factoring Help?

Janitorial and custodial businesses having trouble managing their cash flows can get immediate financial relief from staffing factoring. It is different from traditional, short-term business financing loans because factors don’t look at the business’s credit performance; they are more interested in the creditworthiness of the business’s clients. Therefore, staffing factoring for custodial companies and janitorial services is beneficial for those still building credit or whose credit scores reveal a recent financial problem.

Staffing factoring for janitorial companies and custodial agencies alleviates immediate financial woes that can affect the day-to-day operations of these businesses. For example, suppose your remaining funds aren’t enough to cover payroll and overhead expenses for the month. In that case, you can convert your accounts receivables into cash through janitorial & custodial staffing factoring. You can also use the same strategy to hire seasonal workers ahead of a pay cycle and meet your clients’ unexpected staffing needs.

Advantages of Staffing Factoring for Janitorial & Custodial Staffing Companies

Why should you choose janitorial & custodial staffing factoring over other cash advance loans? Here are some excellent reasons:

  • You can get working capital regardless of your business’s credit score.
  • You can monetize invoices in days instead of how long your client’s pay cycle is.
  • You’ll have the funds to quickly hire more employees and meet your clients’ urgent staffing needs.
  • If you get a non-recourse agreement, you don’t have to pay any additional fee if your clients don’t pay their debt.
  • You can solve cash flow problems without tying your future earnings into long-term loan payments.

How Much Does It Cost?

What’s great about staffing factoring for custodial companies and janitorial agencies is getting nearly the entire sum of your accounts receivables. Advance rates for invoice factoring can fall between 70 and 96 percent, and the staffing industry has always been on the higher end of this range because invoices for services rendered are harder to dispute. 

The cost breakdown of staffing factoring for janitorial companies and custodial services can look like this:

  • Invoice amount: $10,000
  • Advance rate: 85%, or $8,500
  • Reserve: 15%, or $1,500
  • Discount rate: Monthly fee of 2.19%, or $219
  • Type of arrangement: non-recourse

In this example, you will receive an advance of $8,500 within 24 to 72 hours of getting your invoices factored. Deduct the advance from the total invoice, and you get a reserve or deposit of $1,500. Since the agreement calls for a 2.19 percent discount rate, you need to pay your factor $219 for each month the invoice stays unpaid.

Let’s suppose your client paid after four months. Your factor gets to keep $876 ($219 x 4 months), which they will deduct from the reserve. They will then send you the remaining $624 ($1,500 – $876). Since the arrangement is non-recourse, the factor is prepared to absorb losses and won’t charge you extra if the reserve has already been used up and your client still hasn’t paid their invoice. 

Another aspect you’ll need to know regarding the cost of staffing factoring: factors determine the discount rate based on the number of invoices, their dollar amounts, your clients’ credit histories, and how long they usually take to pay their invoices, among others. Here at Business Factors, we can offer advance rates of up to 96 percent, which means you can pay as little as four percent of your accounts receivables. Considering the benefits of janitorial & custodial staffing factoring plus the perks that Business Factors offers (i.e., access to an online account management system, non-recourse factoring), four percent as a fee is worth every penny.

Alternatives to Factoring

If, for any reason, factoring is not feasible for your business, Business Factors has other financing options to choose from. We offer merchant cash advance (MCA), working capital loans, asset-based loans, and revenue-based loans. If you need help deciding which alternative financing is best for your business, we can help. Call Business Factors and request a quote to get started. 

Why Choose Business Factors for Janitorial & Custodial Staffing Factoring?

Business Factors is the best company to approach if you need staffing factoring for custodial companies and janitorial agencies. You can enjoy these benefits if you choose our company:

  • Get risk-free, non-recourse factoring.
  • Simple application process
  • Monetize pending accounts receivables earlier than their pay cycles require.
  • Receive the advance for your invoices in just two to three business days.
  • Get back-office assistance for receivables handling.
  • Get competitive and budget-adjusted rates.
  • Track your factored invoices using an online management system.


Custodial & janitorial staffing companies needing cash flow can get immediate financing through staffing factoring. Although there are several alternative loans that staffing companies can apply for, factoring is the only one that disregards your credit scores. Instead, factors assess your clients’ creditworthiness. Hence, janitorial & custodial staffing factoring is ideal if your business’s credit history is too short or too low for a traditional business loan.

After receiving the advance to your accounts receivables, you can use the money for payroll, operational expenses, hiring more workers, expanding the business, and other essential uses. Factors claim a small percentage of the invoice as their fee, and they deduct this from the reserve (which is the sum on the invoice minus the advance you receive). If your clients pay the invoices early, your factor will send you the remainder of the reserve. 

We’ll be happy to show you how staffing factoring for janitorial companies and custodial agencies work in detail. We can also give you more information about our working capital loans. Get in touch with Business Factors to discover which options are best for your business. 

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