Best Invoice Factoring for Staffing Companies

Turn invoices into capital in days.

If you’re considering staffing factoring for your business, it’s good to know what’s involved in the process. Having a solid background of knowledge on staffing factoring itself — including what it is, how it works, and how to choose the best staffing factoring company for your needs is key for making sure that you’re getting the most out of this innovative funding solution. 

Besides simply knowing what staffing factoring is, you should also have a solid understanding of how invoice factoring for staffing companies like yours can help you run your business with less stress and fewer cash flow shortages. You should also know what’s involved when it comes to qualifying for staffing factoring, and how to pick a partner that will best meet the needs of your business.

At FundThrough, we work with many staffing companies to help them free up cash flow and say goodbye to the hassle of extended payment terms. We’re also entrepreneurs, so we understand the challenges of not having enough cash flow and how difficult it is to be stuck waiting on customer payments — especially when you need capital to make payroll or go after growth opportunities. 

What Is Staffing Factoring?

Staffing factoring is a type of short-term financing that gives you fast access to working capital. It sometimes goes by the names recruitment invoice factoring or invoice financing. To that end, staffing factoring is simply invoice factoring for staffing agencies. How it works is your business sells its outstanding invoices to a factoring company, who gives you an advance on the value of your invoice (minus a small fee). The staffing factoring company then works with your customer to settle the invoice according to the original payment terms.

Staffing companies like invoice factoring for a number of reasons, including its less strict eligibility requirements (many staffing companies qualify!) and that it doesn’t require you to have a lengthy credit history or perfect credit score.  

Why Do Staffing Firms Often Need Staffing Factoring?

Staffing firms like yours, often need staffing factoring or temporary staffing factoring, for a few different reasons, including: 

Making payroll. Without the ability to pay the people you place, you’ll have a negative reputation (and no temporary workers to place!) in no time. Staffing factoring can help you ensure you always have cash in the bank to pay your people on time. 

Clients don’t pay quick enough. The other big reason that staffing firms need a funding source like staffing factoring is that their clients take a long time to pay them. It’s not unheard of for staffing companies to have to wait 30, 60, or even 90 days or longer for payment! Waiting on payments to come in is stressful! Factoring helps remove this stress by funding staffing agency invoices in a matter of days, rather than according to lengthy net terms that are often the industry standard.

Growth opportunities. Without enough cash on hand, it can be difficult to cover everyday expenses and go after big recruiting jobs. These types of growth opportunities allow you to grow your business, but you need to be able to make sure you can pay even more people before your client pays you. Staffing factoring can help bridge any cash flow gaps you might experience during periods of growth. 

Staffing Factoring: Benefits of Invoice Factoring for Staffing Companies

Factoring is one of the most common types of funding for staffing companies and temp agencies for many reasons. Here are just some of the benefits of factoring for staffing company clients say they appreciate, including:

  • Quick funding for payroll. As mentioned above, staffing firms are often stuck waiting weeks or even months to get paid by their clients. This can cause all sorts of cash flow difficulties. With staffing company factoring, you can get outstanding invoices paid in a matter of days vs waiting for weeks on extended net terms, which means you always have payroll funding.
  • Flexible funding. Another benefit of small business invoice factoring is that is lets you get the funding you need, when you need — even if it’s on short notice. With FundThrough in particular, flexibility means there’s no minimum funding obligation every month, no long-term commitment after the invoice is paid, and no need to fund every invoice. Best of all, we offer you access to unlimited funding — giving you the funding you need, when you need it.
  • No debt. Because invoice factoring is not a loan, you don’t have to worry about repaying the advance — your customer pays the invoice factoring company according to the original payment terms.
  • No dilution. Invoice factoring for staffing firms is great because it is a source of non-dilutive funding. This means you get to keep ownership of your company, without giving away control of your business.
  • No bank hassles. Traditional banks are notorious for taking months to approve a business loan or line of credit — even if you’re just looking for an increased limit. If they don’t reject you outright at the start because you have a limit credit history or even bad credit, they require you to complete a ton of paperwork. With factoring, you can get funding in just days. 
  • Easy process. Traditional banks often have a lengthy and confusing application process, while factoring requires very little in terms of paperwork. Plus, you can apply in minutes! At FundThrough, we use our own special mix of automation, AI, and accounting integration with QuickBooks to make it especially easy.
  • Easier to qualify. While conventional lenders insist you have a good credit score to qualify for funding, with staffing agency factoring, it’s not as important. Your customer’s creditworthiness it what matters most, since they’re the ones paying the invoice to the factoring company. Your credit score, business history, and time in business is much less of a factor. 

Types of Invoice Factoring for Staffing Companies

Many types of staffing companies can benefit from invoice factoring.

  • Healthcare and medical staffing agencies
  • Human resources staffing companies
  • Consulting staffing firms
  • Administration staffing companies
  • Manufacturing staffing companies
  • Accounting staffing agencies
  • IT staffing companies
  • Warehouse staffing
  • Headhunters
  • Payroll companies
  • Finance staffing firms
  • Industrial staffing
  • Janitorial
  • Office and Clerical
  • Professional staffing companies
  • The Government

How Staffing Invoice Factoring Works

It’s not uncommon for a staffing agency like yours to wait four weeks (or more) after placing workers to get paid by your client, even though you cover all of the costs up to that point. That’s why invoice factoring, including temporary staffing factoring, makes sense for so many staffing companies.

The process of factoring invoices for staffing agencies is simple compared to many other funding options. Here’s a brief summary of the process:

  • You fill job vacancies and submit invoices to clients.
  • You submit approved, unpaid client invoices to FundThrough.
  • FundThrough advances the full value of the invoice in days (minus a small fee). 
  • You put your capital to work how you want. Use it to cover payroll or operational expenses, or take on new projects.
  • FundThrough waits for outstanding receivables to be paid by your customer.
  • Rinse and repeat!

Staffing Invoice Factoring Costs

Factoring rates vary across different staffing and recruitment factoring companies and are based off their own specific criteria, so we can only speak for FundThrough. With us, you’ll always know the cost of factoring before you fund an invoice. We don’t charge hidden fees, and and there is no cost to open an account. See our pricing page for more info.

Staffing Invoice Factoring Terms

Terms vary, as do many of the requirements of each factoring company. Here’s a few things to look for when evaluating invoice factoring terms:

  • Are you required to factor every invoice, or at least a minimum number or dollar amount of customer invoices every month?
  • Are you being charged hidden factoring fees, such as an account startup fee, wire transfer fee, or invoice processing fee?
  • Are you going to be locked in to a long-term contract? 

Evaluating the terms now will save you time, trouble, and a cash flow nightmare later. (Just so you know, FundThrough has no minimum monthly funding requirements, no hidden fees, and zero long-term commitments after invoices are paid.)

Qualifications: Is Factoring for Staffing Companies Right for My Business?

While qualifications vary across different staffing factoring companies typical requirements include selling to other businesses, having creditworthy customers, and having a managed tax balance with the IRS and/or CRA. You can see if you’re qualified for FundThrough here.

Factoring Companies for Staffing Agencies: What to Look For

If you’re evaluating different companies in your search for invoice financing for recruitment agencies, or any other type of invoice factoring for your staffing firm, ask each candidate you’re considering about these points.

Experience with Staffing Companies and Agencies

A factoring company that has experience in the staffing industry can make the process easier for you, and give you confidence that the factoring company can help. FundThrough is very experienced with helping staffing companies grow and make weekly payroll, with the track record to prove it.

Quick and Easy Setup

Many funding companies for staffing agencies still use manual paper-based processes that slow down the factoring process and waste your time. Look for an invoice factoring company that uses technology to help streamline and speed up the process.

Competitive Rates and Flexible Terms

It’s probably no surprise that the best factoring companies for staffing agencies are transparent about their fees and offer 100% advance rates. A company with a low rate could end up charging hidden fees — you need to know about all fees upfront, or you could end up paying more than if you’d gone with another factoring company. Competitive factoring rates are key, but you need all your money up front so that you can make the most of getting invoices funded, so don’t forget to compare advance rates too.

When Ace Recruitment’s Account Manager, Sami Boubertakh, came to Ace Recruitment, they had just landed a client who was supposed to pay every 45 days. But Ace Recruitment was incurring billings in the range of tens of thousands a week. So they asked themselves, “How are we going to maintain that for six weeks when we don’t have that type of capital? The answer, FundThrough.

ace recruitment logo

Should you choose Invoice Factoring or a Bank Line of Credit?

If your staffing agency struggles with having consistent cash flow, you might consider a bank line of credit (if you qualify and aren’t too new) or choose to factor your unpaid invoices with one of many staffing agency factoring companies. Both have advantages and disadvantages to consider before making a decision, and both can work together for customized funding solutions.

Line Of Credit



  • Convenient capital to draw on anytime.
  • Like a credit card, a LOC gives you the flexibility to borrow what you need, when you need it.
  • LOCs allow you to build your credit history and credit score.
  • You only pay interest on the money you borrow.




  • You can hit your limit quickly if you have a big growth project that requires a large sum of capital.
  • Fees and extra charges can add up, especially if you fail to make payments.
  • You are personally responsible for any LOC debt if your business fails.
  • Banks often won’t work with companies that are too new.
  • Lengthy approval process meant it takes months to qualify for lines of credit.


Invoice Factoring



  • You get access to funding in days, not months.
  • You get an advance on money you’ve already earned.
  • No debt on your books.
  • No dilution of your business.
  • Easier to qualify for than a LOC.
  • Fast and easy setup.
  • Unlimited capital (with FundThrough only).




  • Many small businesses are concerned about the factoring company contacting their customer. We get it — damage to your client relationships can hurt your business. That’s why FundThrough treats your customer like our own. Learn more about how we work with your customers.
  • Many small businesses believe that accounting for factoring transactions in their bookkeeping software is challenging, but our step-by-step guide makes it easy. 

Staffing Invoice Factoring FAQs

Your questions answered.

Whether your agency specializes in temp work or professional recruiting, you might wait weeks or months to get paid for your services. That’s a long time to wait for the funds you need in order to run your business. You can turn invoices into cash by using money from factoring to meet your financial obligations, including make payroll, pay overhead and operating expenses, buy supplies, and keep the lights on while waiting on invoice payments to come in.

Staffing funding companies advance you a percentage of your total outstanding invoices upfront, and then collect the full amount from your customer.

The importance of a payroll factoring program to finance payroll expenses cannot be taken lightly. It gives you the flexibility to factor only the invoices you choose. You have unlimited funding potential, your employees are paid on time, which builds loyalty, and you get the support you need to grow. Staffing payroll factoring also helps you navigate cash flow challenges and manage working capital, so you can get back to work instead of worrying about financial stability and spending time chasing down outstanding receivables.

Both invoice factoring services and bill discounting provide you with working capital in exchange from your accounts receivables / unpaid invoices. But they are different in other ways.

Invoice factoring: When a company sells their accounts receivable or unpaid invoices to a third party, called a factor, it is called invoice factoring or business factoring. You are paid for work already done. You can acquire quick cash without waiting for invoices to be paid from slow-paying customers.

Bill discounting: Also called invoice discounting, bill discounting generates working capital from future payables. Essentially, it is the advance selling of an invoice (or bill) to a discount business or financial institution before the bill is due.

Simple. Intuitive. Staffing Invoice Factoring.

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