Call Us Anytime +1 (800) 672-3844
Funding Application
Client Login
What is payroll factoring? This service gives your business fast access to cash, converting outstanding invoices into same-day funding. It’s a flexible way to cover your payroll needs without taking on new debt or giving up equity.
Nearly 60% of small businesses cite cash flow as their biggest hurdle to making payroll. Payroll factoring bridges the gap when clients pay slowly, keeping you on schedule.
Whether you’re a startup, mid-sized business, or large staffing agency, our payroll financing solution scales with you. Get predictable, on-time funding and focus on growth, not cash-flow gaps.
Are you worried about third-party involvement in sensitive payroll matters? Unlike typical payroll funding companies, Business Factors ensures a discreet, professional approach that protects client relationships and delivers dependable funding.
Reach out today and discover the best payroll funding solutions for your business.
How Payroll Factoring Works
Streamline Cash Flow With a Proven Funding Method
With Business Factors, converting unpaid invoices into fast, reliable payroll funding is a straightforward process designed to keep your workforce paid and your cash flow steady.
Here's how it works:
-
Submit Invoices After Billing Your Clients
Once you’ve billed your customers, send our team a copy of the outstanding invoice.
-
Invoice Verification and Client Credit Evaluation
We verify the invoice details and assess your customer’s credit profile to ensure payment reliability.
-
Receive an Advance on the Invoice
You receive a same-day advance, typically 70% to 96% of the invoice amount.
-
Final Payment Upon Client Settlement
Once your client pays the invoice in full, we issue the remaining reserve funds minus a small factoring fee.
Costs and Fees
Know the Fees Before You Factor
Meeting payroll requires fast, reliable access to cash. Payroll factoring offers a quick, debt-free alternative to traditional financing, minus the delays of bank approvals or added liabilities.
Many businesses compare payroll factoring to options like bank loans, lines of credit, or asset-based lending. Each of these methods of funding for payroll comes with its own cost structure, approval requirements, and impact on cash flow.
To help you understand payroll financing, consider how it compares to other payroll financing methods in terms of cost, risk, and flexibility.
How Payroll Factoring Fees Are Structured
Fees are structured as monthly or weekly payments. Understanding how each works can help you choose the best fit for your payroll cycle and client payment timelines.
Here’s a sample computation:
Monthly Fee Model
For instance, you factor $300,000 in invoices with an 85% advance rate. You receive $255,000 upfront, while $45,000 is reserved for payroll funding services.
Business Factors charges a 3% monthly fee ($9,000) plus a one-time $200 due diligence fee. Fees are applied at the start of each month. If your client pays after five weeks, you’ll owe $18,000 in expenses, making this model more costly for short-term funding.
Weekly Fee Model
Using the same $300,000 invoice and 85% advance rate, you again receive $255,000 upfront with $45,000 in reserve.
With a 0.75% weekly fee, the weekly cost is $2,250. If the invoice is paid in five weeks, the total cost is $11,250, less than the monthly model. However, if payment is delayed, weekly fees continue to accumulate.
Hidden Fees and How To Avoid Them
Not all payroll funding companies are upfront about their pricing. Hidden fees can erode your cash flow and create uncertainty when meeting payroll obligations.
Here's what to watch for:
-
Early Termination Penalties
Some providers lock you into long-term contracts with steep cancellation fees. Always ask about contract terms before signing.
-
Monthly Minimums or Volume Requirements
You could be charged extra if you don’t meet a required factoring volume. Look for providers who offer flexibility as your business fluctuates.
-
Additional Processing or Admin Fees
Seemingly minor charges – like account setup, wire transfers, or credit checks – can add up. Request a complete fee breakdown in writing.
Practical Tips To Avoid Hidden Fees
-
Read the contract carefully before signing, especially the fine print.
-
Ask for a full, itemized list of all potential fees upfront.
-
Choose payroll funding services with transparent, no-surprise pricing policies.
-
Clarify how fees are calculated based on payment timing and invoice size.
Why Your Business Needs Payroll Factoring
How Payroll Factoring Solves Real Cash Flow Challenges
When cash flow is tight and payroll deadlines are approaching, payroll factoring offers a smart and flexible solution. It provides fast funding for payroll without taking on debt or giving up equity. A trusted payroll financing company helps bridge cash flow gaps caused by slow-paying clients so you can focus on running your business. Still asking what is payroll factoring? It’s a financing method that turns invoices into working capital, making it essential for companies that need consistent cash to support growth.
Industries that Benefit from Factoring
Staying Funded, Staffed, and Focused with Industry-Specific Payroll Solutions
Here’s how our payroll financing company helps businesses across multiple sectors, providing for the cash needs of organizations of all sizes:
Staffing Agencies
Construction
Transportation & Trucking
Manufacturing
Security Services
Oil & Gas Services
Which Model Fits Your Business Needs?
Both recourse and non-recourse payroll factoring offer fast access to cash. However, each comes with different levels of risk, responsibility, and cost.
Recourse Factoring
Non-Recourse Factoring
Recourse factoring means your business is ultimately responsible if the client fails to pay. It’s a lower-cost option with higher responsibility for non-payment.
Benefits of Recourse Factoring:
- Lower factoring fees compared to non-recourse.
- Easier approval process and faster setup.
- Higher advance rates available.
- Ideal for companies with reliable customers.
Common Risks To Consider:
- You must repay the advance if the client defaults.
- It puts more risk on your business than the factor.
- It is not ideal for clients with uncertain payment histories.
Under non-recourse factoring, the factoring company bears the risk of non-payment. If your client fails to pay due to credit issues, you're not held responsible for the unpaid invoice.
Benefits of Non-Recourse Factoring:
- Reduced risk: The factor assumes responsibility for client non-payment.
- Added protection for businesses with higher-risk customers.
- Helps preserve cash flow even if clients default.
- Strengthens financial planning with lower exposure to bad debt
Common Risks To Consider:
- Higher factoring fees compared to recourse.
- Stricter credit approval requirements.
- Lower advance rates in some cases.
A Trusted Way to Fund Payroll — Fast!
When payroll is due, delays aren’t an option. Business Factors delivers fast, reliable payroll factoring that gives you immediate access to working capital without the risk of client non-payment.
Our non-recourse options protect your business, so you can meet payroll and focus on growth, not collections.
Missed payroll stresses your team and business. Let’s solve this together. Talk to Business Factors and discover a smarter, more dependable way to fund payroll.
FAQs
-
What is payroll factoring?
This financing solution converts unpaid invoices into immediate capital to cover employee payroll.
-
How fast is funding?
Funds are typically available within 24 hours of invoice approval.
-
Will my clients be notified?
Yes. Business Factors communicates with clients in a professional and discreet manner to maintain strong relationships.