TempWorks provides payroll funding for all sizes of staffing companies, from start-ups to well-established recruiting services with large corporate clients. We will help you grow and flex with your client base.
A payroll funding contract represents a complex, long-term transactional relationship; terms can be critical to your profitability. TempWorks will work with you to design a reasonable arrangement that addresses your unique needs.
How to Review Payroll Funding Alternatives
Consider the following issues when choosing a payroll funder (factor) and negotiating a contract:
- Experience in the industry: TempWorks has roots in the staffing business going back to 1959 and has helped many leading companies flourish.
- Term of the agreement: Payroll funding contracts vary in length from one month to several years. A contract of one month or less in length will typically have higher costs and interest rates than a longer contract.
- Interest rate: The interest rate varies based on your volume and history. A start-up will pay a higher rate than a large, well-established company.
- Cancellation policy: A default provision may take effect at cancellation or if you stop funding. Penalties cover costs to the funder in new account setup, due diligence and covering the start-up phase.
- Term of renewal: A contract may include an evergreen clause that automatically renews unless you give a 120-day notice of cancellation. If so, you should re-evaluate the contract before each renewal period begins.
- Billing: An important factor to negotiate, based on expected aging of your invoices, is the application of overdue payment charges. Variations include a single fee at 30, 45, 60 or 90 days, or a fixed-percentage charge every day after 30 days.
- Advance rate: This is the amount advanced to you when the funder buys your invoice. A rate of 90% means the funder advances $9000 on a $10,000 invoice, retaining the balance as a reserve.
- Where the funding fee is applied: In a 90% rate agreement where a 5% funding fee is taken from your advance, you only receive 85% of your invoice. At TempWorks, you will receive the full advance rate quoted, and your funding fee comes out of the reserve value of your invoice.
Funding from a full-service provider
TempWorks is a full-service funding provider for staffing companies. We provide complete software and service solutions for recruitment and payroll, in addition to payroll funding with a flexible remittance system.
- Payroll funding
- Credit and collection services
- Payroll processing
- Web hosting
- Staffing software
- Disaster recovery
- Time clock
Press Release: Data Center Expansion, New Funding Contract
Essay: Payroll Funding Perspectives by CEO, Gregg Dourgarian
Eassay: Thinking PEO? Think Twice by David Dourgarian and Jack Terrana
Related Product: Enterprise Factoring and Payroll Funding Software
Industry Site: International Factoring Association