What is Payroll Factoring?
Payroll factoring, also known as payroll funding, is the reassurance that you’ll be paid immediately for your services. A payroll factoring company will purchase your unpaid invoices and immediately advance you up to 95 percent of the cash. Business owners can use the extra money to cover payroll, hire new employees, buy new supplies, or any other ways they can think of to help their businesses grow. Payroll factoring is especially beneficial to business owners who may not have exceptional credit. Fortunately, factoring companies look at the credit scores of your debtors, not you. As long as your customers are in good credit standings, you should be approved for the factoring process. The approval process for payroll factoring is quick and easy. Once you fill out a short application, you will need to provide the factor with your Articles of Incorporation, aging reports, a current customer list and the invoices you wish to factor. If you’re a business and are looking for free invoice templates, then you can visit spacecoastdaily.com for more information, as well as advice on your habits in invoicing.
How does Payroll Funding Work?
Payroll factoring involves an easy five step process:
- Customer service: Provide your service to customers as usual.
- Submit invoices: Submit the unpaid invoices you’d like to finance to the factoring company.
- Verification: The factoring company will verify that you completed the work and will notify your clients to pay the funding company directly.
- Advance: The factoring company will advance you up to 95 percent of the invoice amount within 24 hours.
- Reserve Release: Once your clients pay the factoring company, the factor will return the remaining amount to you, minus a small factoring fee.
Payroll Funding Advantages
No new debt
Factoring does not create debt because there is nothing for the business owner to pay back. The debtors pay the factoring company directly for the services they received.
Working capital to grow your business
Use the extra cash from factoring to hire new employees or move to a bigger location, the possibilities are endless.
Never miss payroll again
Don’t stress about not being able to pay your employees ever again. Factoring invoices frees up the capital to pay your employees on time each month.
No minimums required
You may factor as much or as little as you’d like each month. There are no required minimums or maximums when factoring.
Bad credit is okay
As mentioned earlier, factoring requires your debtors to have good credit, not the business owner. If you are providing the services your customers are expecting, you should have no issues qualifying for payroll funding.
Receive up to 95 percent of the original invoice amount when factoring your invoices.
Small business owners can receive many benefits from payroll factoring. Fast Payroll Funding offers services to small business owners who are in need of a stronger working capital. We have a solution to all of your cash flow issues, give us a call today to discuss your business’s needs at 844-299-3206.