What is the difference between invoice factoring and payroll funding? None; they are the same.
The terms payroll funding and invoice factoring refer to accounts receivable factoring, specifically for temporary placement staffing agencies.
The most common term is payroll funding, as it typically covers payroll based on the staffing agency's billings/invoices and associated accounts receivable.
An invoice factoring/payroll funding facility provides numerous benefits to temporary and contract placement staffing agencies, specifically designed for temporary staffing where customers are billed on terms ranging from 30 to 90 days, potentially impacting cash flow.
Having a payroll funding facility in place can help avoid cash flow shortages caused by unpaid invoices. It can also aid in the agency's current growth by providing credit terms to more customers.
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