Payroll covered
while your customers still pay slow.

Several entire industries are built on a permanent calendar mismatch. The workforce gets paid weekly or biweekly. The customers pay on 30, 45, 60, or 90 day terms. The business itself is profitable on a unit basis — the gross margin on every billed hour or shift covers the labor cost and produces a healthy contribution. But the working capital required to bridge between payroll out and customer payment in scales linearly with revenue. Every $1M of additional annualized billing requires roughly $80K to $150K of additional permanent working capital sitting in the operating account just to keep payroll running. Growth makes the problem worse, not better.

This is the structural reason staffing agencies, IT consultancies, home health providers, government contractors, trucking carriers, and certain professional services firms use payroll funding as a permanent operating tool rather than a one-time bridge. The funding does not exist because the underlying business is unhealthy. It exists because the payment cycle of the customer base requires it. A $20M annual staffing firm needs $2M to $3M of working capital just to run, and that capital cannot come from retained earnings without freezing growth for years.

Two structures, depending on the customer base

We structure payroll funding two distinct ways depending on what the receivables look like. When customers are named, creditworthy institutions — corporate accounts, government agencies, insurance carriers, hospital systems, large GCs — we structure as an AR-backed line. We advance 80% to 90% of assigned invoice face value as they are issued each week. Customer payments retire the advances. The funding grows with your billing and the structure is essentially uncapped for healthy operators. Pricing is meaningfully lower than working capital advances because the collection risk is on identifiable, rated counterparties.

When customers are diffuse — many smaller buyers, retail, mixed business and consumer — we structure as working capital advances sized against trailing deposit history. Each advance covers two to four payroll cycles and amortizes through daily debits over 4 to 12 months. The cost is higher than the AR structure but the underwriting is simpler and the operator retains the customer relationship without factor notification.

Staffing agencies are the canonical payroll funding client. The model is built on a cash gap: temporary workers receive checks weekly, while the corporate end users they were placed with pay on net-30, net-45, or net-60. A staffing agency growing from $5M to $15M of annual revenue inside 24 months will exhaust its retained earnings inside the first year of acceleration. The AR-backed payroll line is not optional for a growing staffing firm — it is the financing structure the model requires. We have AR-backed lines deployed across staffing operators from $500K weekly payroll to $3M+ weekly payroll, in light industrial, healthcare, IT, and clerical placement.

Home health and home care agencies share the same dynamic with a different counterparty mix. The receivables are from Medicaid, Medicare, and managed care payers, with collection cycles ranging from 30 to 120 days depending on state and program. Caregivers are paid biweekly. The structural cash gap is identical to staffing. AR-backed payroll funding against insurance and government receivables is one of our most stable funding categories — the collection risk is essentially zero on assigned receivables to rated counterparties, and we can fund efficiently against it.

Government contractors and IT services

Federal contractors waiting on prime payments, state contractors waiting on appropriation cycles, IT consultancies billing Fortune 1000 clients on net-60 — all face the same problem at different scales. The fix is the same: an AR line sized against assigned receivables, replenishing as payments come in. Pricing on these files is among our most competitive because the receivable quality is extremely high.

When working capital structure beats AR

Not every payroll-funded operator has clean AR. Restaurant groups with hourly staff and primarily credit-card and cash revenue have no factor-able receivables but real weekly payroll obligations. Home services companies with diffuse residential customers face the same shape. For these operators we use a working capital structure that funds against trailing deposits and amortizes through daily debits. The cost is higher than AR but the file is simpler and the operator retains all customer relationships without factor notification or assignment.