Staffing factoring: make payroll every week, even when clients pay in 60 days.
Your people get paid every week. Your clients pay in 30, 60 or 90 days. Factoring closes that gap: you sell the invoice for hours already worked and get the cash once it's approved, instead of waiting for the client.
Daniel Chirino · Business Development Officer, 1st Commercial Credit
Updated: October 28, 2026
Why staffing agencies run short of cash
You place people, they work the week, and you run payroll and payroll taxes. The client gets an invoice with approved timesheets and pays on net 30, 60 or 90. Every new contract means more payroll before the first payment comes in, so the faster you grow, the bigger the gap.
Before factoring I worked in payroll, at Paychex and at a PEO, so I know payday doesn't move. For most agencies the hard part isn't finding clients. It's funding payroll while the client takes 30 to 90 days to pay. Bigger accounts, government bids and VMS or MSP programs usually come with longer terms, which makes the gap wider.
How factoring works for a staffing agency
Invoice the week
Send the invoice with the approved timesheets, the same way you bill your client today.
Get funded
1st Commercial Credit verifies the invoice and pays you. Many agencies fund weekly, so the payroll account is covered by Wednesday.
Your client pays 1st Commercial Credit
On its normal terms. Your client is notified of the assignment and pays 1st Commercial Credit directly.
What 1st Commercial Credit offers staffing agencies
The offer
- Rates from 0.69% to 1.59%, depending on your volume, how fast your clients pay and their credit.
- Account setup in 3 to 5 business days. Once approved, invoices are paid within 24 hours.
- Weekly funding to keep payroll on schedule.
- From about $10,000 a month up to $10 million for larger agencies.
- No financial statements up to $350,000. Low credit scores accepted.
- About 95% of the credit decision is based on your clients, not on your agency's history. New agencies can qualify.
What you'll need
- Creditworthy clients: the companies that pay your invoices.
- Invoices with backup or approved timesheets.
- Your signed master service agreement and rate sheets.
- Receivables free of liens, or a subordination agreement.
- Your clients' acknowledgment of the notice of assignment.
- An incorporated business (an LLC is fine, sole proprietorships are not), with invoices and agreements in its registered name.
Source: 1st Commercial Credit's staffing page, read October 28, 2026. Rates and terms are confirmed in writing before you sign.
A real deal
Published by 1st Commercial Credit. See all deals.
When factoring is not the answer for a staffing agency
- Your clients pay weekly or on receipt. There's no gap to fill.
- Your business is a sole proprietorship. 1st Commercial Credit works with incorporated businesses; an LLC is fine.
- Your markup can't absorb the fee. Factoring fixes timing, not margin. If every placement loses money, getting paid faster means losing it faster.
- The hours aren't approved, or the client disputes them. Factoring is for work that's done and accepted.
Questions staffing owners ask me
Will my clients know I'm factoring?
Yes. Your clients acknowledge the notice of assignment and pay 1st Commercial Credit directly, on the same terms they already have with you.
I just started my agency. Can I qualify?
New agencies can qualify. The decision weighs your clients' credit far more than your agency's track record.
How fast is the first funding?
Account setup takes 3 to 5 business days. After that, approved invoices are paid within 24 hours.
What will it cost me?
1st Commercial Credit publishes rates from 0.69% to 1.59% for staffing, depending on your volume, how fast your clients pay and their credit. Before you sign, I walk you through every cost in writing.
Who are your clients?
Tell me who you bill and on what terms. I'll tell you whether factoring fits your agency.
Also read: how invoice factoring works · security and cleaning · factoring behind an SBA loan