Payroll Funding
A working-capital facility used specifically to cover payroll between the date wages are paid and the date client invoices are collected. Most common in staffing, but used across labor-intensive industries.
What it solves
Payroll funding addresses one specific problem: payroll is due every week, but client receivables convert to cash on a much longer cycle. Without bridge capital, growth gets capped by the size of the operating cash balance.
It is most often structured as factoring against client invoices, with the funder advancing cash the same day timesheets are billed.
Common pairings
Payroll funding is regularly paired with back-office support such as invoicing, collections, and credit checks on new clients. For staffing firms scaling quickly, this reduces the need to hire administrative headcount in parallel with sales growth.
Related Entries
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