A staffing agency's product is other people's payroll: workers are paid weekly while clients settle in thirty to sixty days. Every placement widens that float, so the faster an agency grows, the more cash it consumes — the classic case of a business that succeeds its way into a funding requirement.
The float, measured
Weekly payroll times the weeks until clients pay is the standing float. An agency running $40,000 a week of placed payroll on 45-day terms is carrying roughly a quarter of a million dollars of other people's wages at all times — as an illustration of shape, not a quote. Growth adds to it before a single new invoice settles.
Factoring fits the shape exactly
Invoice factoring was practically designed for staffing: the invoice is issued the week the shifts are worked, the advance funds the payroll behind it, and pricing rides on the client's credit — which for agencies staffing solid employers is a strength. The facility scales with invoicing, so growth funds itself instead of outrunning you.
Where a line or working capital fits instead
Agencies with a few reliable clients and modest float sometimes prefer a line of credit drawn against the payroll weeks — simpler, and invisible to clients. One-off moments — onboarding a large new account, payroll software, insurance deposits — suit working capital with a defined payback.
Growing headcount safely
Before signing a client that doubles placed headcount, price the float it adds and confirm the facility covers it — a great logo on net-60 can sink an unfunded agency faster than no client at all. Payroll taxes and workers' comp deposits belong in that maths too; they scale with the same headcount and are less moveable than wages.
Watch the concentration line as you grow: an agency whose float sits mostly with one client is carrying that client's payment behaviour as its own risk. Spreading placements — or at least pricing the risk into that client's margin — keeps one slow payer from becoming everyone's missed payroll.
Read next: Staffing agency funding · Invoice factoring · If you already have funding
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