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Top 5 Questions to Ask when Choosing a Payroll Funding Company

Last Modified : May 10, 2024

Fact-checked by: Bruce Sayer

Choosing the right Payroll Funding company can be one of the most important decisions for your Staffing Agency. No matter the type or size of your business, covering payroll is a top priority because it must follow a set schedule and cannot be delayed. Choosing the wrong Payroll Funding provider can cost you time, money and potentially leave you without funding to consistently make payroll. The answers to the following questions will help you determine the best partner:

1. How long has the financing company been in business?

You want to work with a funding partner who has a proven stable operating history. Although length of time in business doesn’t always guarantee quality, it is an indication of stability. Do your research and read client reviews.

2. How much staffing industry experience does the financier have?

Look for a Payroll Funding provider who has experience working with staffing businesses: Do they understand, and can they clearly and specifically talk about your business challenges, or are they being vague? Do your homework and look for testimonials from other staffing businesses. Look for a well-rounded funder; not necessarily for someone who is focused on the staffing industry. In many cases, the latter will cut financing to their clients overnight if they feel they are too exposed to a single industry.

3. What are the funding limits for staffing companies?

You want an honest answer. Realize that all funding companies have lending limits and look for those who are honest about their limits. They should be willing to clearly explain how those limits are set, including what information they require to make the decision and how you can renegotiate the limits should your business’s situation change.

4. Will the funder contact your clients?

Because Payroll Funding is based on your accounts receivable, the funder may have occasional contact with your clients. When you have a reliable funder, they will be upfront about anticipated client interactions and provide a source where you can check on account activity. Be wary of funders who are ambiguous about the process or avoid answering the question altogether. The intention should be not to confuse the client but quickly collect on outstanding invoices before they become a detriment to the business.

5. Are any parts of the operations outsourced to third parties?

The funding should be handled by the lending company and not be outsourced. If any of the funding is outsourced to a third party (usually a lending platform), the funder no longer has control over it and cannot guarantee the agreed upon funding limits will be met. On the other hand, as funders aren’t experts in back-office services such as timesheet management, payroll preparation, worker’s compensation, etc., they will often outsource these functions to a specialist. However, you shouldn’t be obliged to sign up for these additional services if you prefer to keep these processes in-house or you already have a partner who is managing your back office.

eCapital Commercial Finance Makes Payroll Funding Easy

Here’s how it works:

Step 1: You invoice your customers and send us a copy.
Step 2: We pay up to 90% of the value of your invoice.
Step 3: We collect payment.
Step 4: We pay any remaining balances.

 

ABOUT eCapital

Since 2006, eCapital has been on a mission to change the way small to medium sized businesses access the funding they need to reach their goals. We know that to survive and thrive, businesses need financial flexibility to quickly respond to challenges and take advantage of opportunities, all in real time. Companies today need innovation guided by experience to unlock the potential of their assets to give better, faster access to the capital they require.

We’ve answered the call and have built a team of over 600 experts in asset evaluation, batch processing, customer support and fintech solutions. Together, we have created a funding model that features rapid approvals and processing, 24/7 access to funds and the freedom to use the money wherever and whenever it’s needed. This is the future of business funding, and it’s available today, at eCapital.

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eCapital Corp. is committed to supporting small and middle-market companies in the United States, Canada, and the UK by accelerating their access to capital through financial solutions like invoice factoring, factoring lines of credit, asset-based lending and equipment refinancing. Headquartered in Miami, Florida, eCapital is an innovative leader in providing flexible, customized cash flow to businesses. For more information about eCapital, visit eCapital.com.

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