Payroll Funding for Staffing Agencies: How It Works, Week by Week
Your temps get paid every Friday. Your clients pay in 30, 45 or 60 days. Payroll funding covers the weeks…
Janitorial Factoring: Fund Cleaning Payroll While Clients Pay on Net 30 to 60
Commercial cleaning contracts bill once a month and get paid 30 to 60 days later. Your crews get paid every week or two. Factoring advances most of each invoice the day you bill it, so a new building contract doesn't drain your cash.
A janitorial company works a full month before it can bill for it, then waits again while the client’s accounts payable team processes the invoice. Meanwhile, cleaners, supervisors, supplies and equipment all get paid on time. A new building contract can mean two or three months of payroll before the first check from that client arrives.
Janitorial factoring turns those monthly invoices into cash when you bill them. You invoice your client for cleaning already done, sell the invoice to a factoring company, and receive most of its value the same day. The client pays the factor on its usual terms, and the factor sends you the rest, minus its fee.
Where the Cash Gap Comes From
| Your side | Your client’s side | |
|---|---|---|
| When money moves | Crew payroll every week or two, plus payroll taxes, supplies, equipment and insurance | One invoice a month, paid on Net 30 to Net 60. Schools, hospitals and government buildings can take longer |
| What grows it | A new building, added floors, day porters, extra services such as floor care or post-construction cleans | Month-end billing, approval of the service, batch payment runs |
| What it feels like | Payroll for a new contract starts before you can send the first invoice | A good client that pays on its own schedule |
What Qualifies
Factoring works on invoices for cleaning already done, billed to a business or a public agency.
- Commercial properties. Office buildings, property management companies, retail centers, warehouses and industrial sites.
- Medical and care facilities. Medical offices, clinics, hospitals and senior living communities that contract cleaning directly. The facility is your client, so the invoice qualifies.
- Schools and public buildings. School districts, colleges and government offices. Invoices to public agencies can need extra paperwork to assign payment, so raise them when you apply.
- Recurring and one-time work. Monthly contract cleaning, plus completed project work such as floor stripping, carpet cleaning or a post-construction clean, once it’s done and invoiced.
What doesn’t qualify: residential cleaning billed to homeowners, and services not yet performed, such as billing a month in advance. The approval question is about your client. Will this business or agency pay this invoice? We review your company too, without a hard credit pull, and we don’t pull owners’ personal credit reports or scores.
Proof of Service
We verify that the cleaning was done and that the invoice is due. That can be a client’s sign-off, an inspection or service report, or the client confirming the invoice by email or in its vendor portal. Clear service records make verification fast.
A Worked Example: A New Building Contract
Here’s a cleaning company that wins a $40,000-a-month contract for an office building. The figures are hypothetical, not an offer, and use our estimator’s figures for professional services.
Twelve cleaners work 25 hours a week at $18 an hour, so each biweekly payroll is $10,800. The company bills once a month, and the property manager pays on Net 45.
| When | What happens | Amount |
|---|---|---|
| Days 1–30 | The crew cleans the building. Two biweekly payrolls go out | −$21,600 |
| Day 30 | You invoice the property manager for month 1 and submit the invoice to Sigma | $40,000 |
| Same day | Sigma verifies the invoice and sends the advance | $32,000 |
| Days 42 and 56 | Two more payrolls, paid from the advance | −$21,600 |
| Day 60 | You invoice month 2, and Sigma sends that advance | $32,000 |
| Day 75 | The property manager pays the month 1 invoice, $40,000, to Sigma | — |
| Once it clears | You request the $8,000 reserve, and Sigma releases it minus a $1,470 fee | $6,530 |
| For month 1 in total | You receive the advance plus the released reserve | $38,530 |
Without funding, the company would run five payrolls on the new contract, $54,000 in wages, before the first payment arrived on day 75. With funding, the company covers the first month’s two payrolls itself, and from day 30 each month’s invoice pays for the next month’s payroll.
Factoring can’t advance against cleaning you haven’t billed yet, so the first month is always yours to carry. If your contract allows it, billing twice a month shortens that stretch to two weeks.
Compare the fee with your margin. A month of wages on this contract runs about $23,400, so each $40,000 invoice carries about $16,600 above wages, before payroll taxes, supplies, equipment and insurance. Funding it at 45 days costs $1,470.
What It Costs
Your agreement sets a fee schedule by payment period. The fee is calculated on the full invoice amount, and the longer a client takes to pay, the higher the fee. It comes out of the reserve when the client pays, so you don’t pay it up front. There are no setup fees, wire fees or monthly minimums.
Here’s the same $40,000 monthly invoice at three payment periods, using our estimator’s figures for professional services. It’s hypothetical, not an offer.
| Client pays in | Advance | Reserve | Fee | Reserve released to you | You receive in total |
|---|---|---|---|---|---|
| 30 days | $32,000 | $8,000 | $980 | $7,020 | $39,020 |
| 45 days | $32,000 | $8,000 | $1,470 | $6,530 | $38,530 |
| 60 days | $32,000 | $8,000 | $1,960 | $6,040 | $38,040 |
A client who pays sooner costs you less. Our guide to invoice factoring costs explains what sets the fee and how to compare quotes from different factors.
Starting Out or Growing
New cleaning companies can sign before their first invoice. $0 in sales is fine at signing. We generally look for invoice volume to reach at least $50,000 a month as the company grows. That’s a growth expectation, not a condition of signing and not a fee commitment.
The best time to set up factoring is before you sign a large new contract. Get a proposal while you’re bidding, so you know how the payroll will be covered from the first month.
How to Compare Janitorial Factoring Companies
| Ask | Why it matters | Sigma’s answer |
|---|---|---|
| How fast is funding after setup? | Payroll runs on a fixed day | Same-day funding on invoices you submit, after 24–48 hours of onboarding |
| How do you verify the work? | Slow verification delays every monthly invoice | Client confirmation that the service was done and the invoice is due, by sign-off, service report, email or portal |
| How is the fee calculated? | A low headline rate can grow when clients pay slowly | A fee schedule by payment period, calculated on the full invoice and written into the agreement |
| When do I get my reserve? | It’s money you’ve already earned | Released on request once client payments build a reserve balance |
| What happens if a client doesn’t pay? | Decides who carries the loss | Recourse, so the invoice comes back to you. Optional credit insurance pays when an insured client fails to pay, under the policy’s terms |
| How long is the agreement, and how do I leave? | Exit terms matter once you outgrow factoring | A standard 12-month agreement, a trial period on request, and exit terms such as moving to a bank line can be written in. The agreement has an early-termination fee, stated in the proposal |
| Are there other charges? | Setup, wire and minimum-volume fees add up | No setup fees, no wire fees, no monthly minimums |
If you already factor with another company, we pay off your current factor directly through a buyout. Our guide to switching factoring companies explains how that works.
What to Have Ready
- Your client list, cleaning contracts and each client’s payment terms
- A sample invoice and how each client confirms the service
- An accounts receivable aging report, if you’re already billing
- Business formation documents and a voided check
- Your current factoring agreement, if you’re switching
Within 48 hours, you get a proposal with your advance, fee schedule and terms, and you don’t have to sign it. See how factoring works at Sigma, or read more about factoring for service businesses.
Questions About Janitorial Factoring
Will my clients know I factor my invoices?
Yes. A Notice of Assignment asks each client to send payment to Sigma. It’s routine for property managers and facility accounts payable teams, and your crews, schedules and client contacts stay the same.
Can I factor only some contracts?
Yes. You choose which clients’ invoices to submit. Many cleaning companies fund their slow-paying accounts and leave quick payers out.
Can I factor an invoice before the month is over?
No. Factoring advances against work already done and invoiced. If your contract allows billing twice a month, you can factor each invoice as you send it.
What if a client disputes part of an invoice?
We work with you to resolve it. We handle a dispute about the service itself, such as a missed clean or a deduction for a complaint, case by case, and credit insurance doesn’t cover disputed work.
Is janitorial factoring a loan?
No. You’re selling invoices for cleaning already done, so there’s no loan balance or repayment schedule. Funding grows with your contracts instead of being capped at a credit limit.
Common Questions
What Business Owners Ask Before They Factor
Short answers on advances, funding speed, risk and customer notice. The full FAQ covers fees, contracts and qualifying.
Get in touchHow much of each invoice do you advance?
Most businesses receive 80–90% of the invoice value up front. Freight carriers receive a full advance, which is standard in freight factoring, and we make exceptions to the range case by case. When your customer pays, we release the remaining balance to you, minus our fee.
How fast can I get funded?
Setting up your account typically takes 24–48 hours from signup. After that, we fund invoices the same day you submit them.
What happens if my customer doesn't pay?
Sigma factors with recourse, so an invoice your customer never pays comes back to you. You can add credit insurance, which pays when an insured customer fails to pay, under the policy's terms. We don't offer non-recourse factoring. It costs more and covers only a customer's bankruptcy or insolvency, so late payment and non-payment stay with you anyway. Compare the options.
Will my customers know I use factoring?
Yes. A Notice of Assignment tells your customer to send payment to Sigma, so how we handle collections and communication matters. The staffing and service business pages explain how that works in practice.
How is factoring different from a line of credit?
Factoring is the sale of invoices you've already issued, so the funding grows with your sales. A line of credit is a loan with its own underwriting and covenants. Read factoring vs. a line of credit for a side-by-side comparison.
See Your Advance Rate and Fee in Writing
Tell us about your business and the invoices you want funded. Within 48 hours you get a proposal with your advance rate, fee and terms, and you don't have to sign it.
- No obligation to sign
- No hidden fees
- No personal credit checks required