Payroll Funding: Make Payroll Every Week, No Matter What

Payroll Funding: Wages Before Clients Pay

Your crew gets paid Friday whether or not a client has paid you. You receive 70%–90% of approved invoices, with same-day approval and funding within 24 hours once your account is active. Payroll funding uses invoices you already earned, so you add no debt to meet payroll.

  • ✓Advance rate: 70%–90% on approved invoices for completed work.
  • ✓Timed to your pay run. You submit the week’s invoices and fund wages, payroll taxes and benefits once your account is active.
  • ✓Your clients’ credit carries the decision. Your credit score does not decide approval.
70%–90%Advance on approved invoices
Same DayApproval on a complete application
24 hrsFunding once your account is active

Price funding against your payroll run

Enter your billing volume and client payment terms for an estimated advance before payday.

Executive Summary: Payroll Funding

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What it is: Payroll funding is defined as advancing cash against invoices so a business can meet weekly or biweekly payroll before customers pay. You sell approved invoices to IFXI’s lending partner and use the advance for wages. It is not a loan: no debt goes on your balance sheet.

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The numbers: Advance rate: 70%–90% of approved invoices · Approval: same day on a complete application · Closing: 2–5 days · Funding: same day or within 24 hours once your account is active · Factoring fees: 1%–3% per period · Estimated minimum monthly volume: ~$50,000.

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Key constraints: Only B2B invoices for work already done qualify. Consumer billing, disputed invoices, invoices past due more than 90 days and receivables under another lender’s UCC lien are excluded. Plan your first funded payroll after the 2–5 day setup.

The Fast Facts on Payroll Funding

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How can I make payroll when clients pay late?

The short answer is that you sell the approved invoices those clients owe and receive 70%–90% of their value within 24 hours once your account is active. New accounts get same-day approval and close in 2–5 days, so set up before the payroll you need to cover.

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What does payroll funding cost?

The short answer is 1% to 3% of the invoice per period, assessed when your client pays. Client credit, payment terms and your monthly volume set where you land. See how the factoring fee is set.

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Can I use invoice factoring to fund weekly payroll?

Yes, you can fund weekly payroll with invoice factoring when you bill commercial clients with acceptable credit. Once your account is active, you submit the week’s approved invoices and receive the advance within 24 hours, ahead of your pay date.

Cash flow gaps payroll funding can close

Wages weekly, clients on 30 to 45 days

Your team is paid every week or every other week. Clients pay on 30 or 45 day terms, so a growing business carries several payrolls before the first check arrives.

A new contract raises payroll first

Adding a crew or a shift adds payroll right away. The client’s first payment comes a month or more later, and payroll funding covers those weeks from the invoices the new work creates.

Payroll taxes cannot slip

Withheld taxes are due on the IRS deposit schedule regardless of client payments. Falling behind can lead to a federal tax lien; see factoring with a tax lien.

How payroll funding lines up with your pay cycle

The payroll float, in dollars

Illustrative: a 25-person crew at $25 an hour for 40 hours is $25,000 of gross wages each week. On net-45 terms, more than six of those payrolls are out before the first client check clears.

Invoices fund the payroll

You bill the client for the week’s work, sell the approved invoice, and use the advance for wages, payroll taxes and benefits. The client pays the lending partner under a Notice of Assignment. Read the invoice factoring basics.

Who uses payroll funding

Staffing agencies with weekly W-2 payroll (staffing factoring), contractors and subs waiting on draws (subcontractor financing), and healthcare providers billing commercial insurers (healthcare).

Typical Projects

Three payroll cycles and what each needs

Payroll funding follows your pay run. Find the pattern that matches yours to see how it lines up with client payment terms.

Weekly W-2 workforces

Weekly wage cycle

You pay every Friday without exception while clients settle on 30 or 45 day terms. The gap is permanent and grows with every new placement.

Typical weekly payroll$30,000–$200,000

Client termsNet-30 to Net-45

Advance rateUp to 90%

Estimated fee1%–3% per 30 days

Funding rhythmInvoice Monday, funded within 24 hours once your account is active

What you submit

✓ Approved timesheets for the pay period

✓ Payroll register with gross wages and employer taxes

✓ Client invoices covering the same period

✓ Proof your payroll tax deposits are current

Payroll tax deposits that are behind can delay funding. Unpaid Form 941 liabilities can lead to a federal tax lien, which the lending partner reviews case by case.

Construction & prevailing wage

Certified payroll funding

Crews are paid weekly at prevailing wage rates while the general contractor pays on a monthly draw that can take 60 days to arrive.

Typical weekly payroll$40,000–$300,000

GC termsNet-45 to Net-75 after draw approval

Advance rate70%–90% of approved billing

Estimated fee1%–3% per 30 days

Funding rhythm24 hours from an approved pay application once your account is active

What you submit

✓ Certified payroll reports for each project

✓ Approved pay application or progress billing

✓ Conditional lien waivers for the billed period

✓ Union benefit and fringe remittance confirmations

Fringe benefit arrears can delay funding, so keep union trust contributions current.

Healthcare & per diem staffing

Per diem shift payroll

Shifts are booked and worked within the same week, and clinicians expect payment days later while facilities bill through a VMS on 45 to 60 day cycles.

Typical weekly payroll$50,000–$350,000

Facility termsNet-45 to Net-60

Advance rateUp to 90%

Estimated fee1%–3% per 30 days

Funding rhythm24 hours from approved shifts once your account is active

What you submit

✓ Shift confirmations approved in the facility system

✓ Clinician pay rates and assignment records

✓ Facility or VMS billing export

✓ Current credentialing files for working clinicians

What creates a shortfall: cancelled shifts billed in error, which the facility deducts from a later payment.

Paying 1099 contractors, running biweekly cycles, or working through a PEO? Put your pay frequency and client terms in the quote form, and an IFXI specialist forwards them with your request.

How to get funded with payroll funding in 3 steps

1

Request your quote

Send your payroll schedule, recent client invoices and your AR aging report through the quote form. An IFXI specialist reviews your request and forwards it the same day.

2

Approval & funding

The lending partner checks your clients’ credit, confirms the invoices and sends each client a Notice of Assignment. Approval comes the same day and your account closes in 2–5 days. You then receive 70%–90% of each invoice within 24 hours once your account is active.

3

Receive your reserve rebate

Your client pays the lending partner on its normal terms. After that payment clears, you receive the reserve minus the factoring fee.

How money moves in payroll funding: you request a quote, an IFXI specialist forwards it, the lending partner advances 70% to 90% of approved invoices for payroll, your client pays the lending partner, and you receive the reserve minus the fee.YouIFXI specialistLending partnerYour client1. Quote request2. Forwarded same day3. Advance of 70%–90% for payroll; reserve minus fee after step 4You bill the week’s work4. Pays per Notice of Assignment

Funding timeline for payroll funding

StageTypical Timeframe
Quote request submittedDay 0
Credit review and approvalSame day on a complete application
Account setup and UCC-1 filing2–5 days to close
First payroll invoices funded24 hours after your account activates
Ongoing weekly submissionsSame-day funding
Reserve rebate releasedAfter your client’s payment clears

Timeline notes for payroll funding

  • ✓Submit invoices early enough to fund before your pay date.
  • ✓Keep payroll tax deposits current; a tax lien gets a case-by-case review.
  • ✓The lending partner files a UCC-1 financing statement on your receivables when your account opens.
  • ✓Under recourse factoring you keep liability if a client does not pay. Non-recourse covers nonpayment for a reason the agreement covers, such as your client’s insolvency, and prices toward the higher end of the 1%–3% range.
  • ✓Estimated minimum monthly volume: $50,000 per month, varying by program.

Who qualifies for payroll funding and what you need

RequirementWhat qualifiesNotes
Invoice typeB2B invoices for work already completedConsumer billing does not qualify.
Client creditCommercial clients with acceptable creditThe credit review looks first at who pays the invoice.
Invoice ageUnder 90 days past dueOlder invoices do not qualify.
Existing liensNo UCC lien from another lender on your receivablesA tax lien does not rule you out; it gets a case-by-case review.
Payroll recordsA current payroll register and tax deposit historyThese confirm the payroll the advance covers.
Monthly volumeEstimated ~$50,000 a monthNo maximum.
Your creditNo minimum credit scoreThe application authorizes business and personal credit reports.

Quote documents for payroll funding

  • ✓Client invoices for the period you want funded.
  • ✓Timesheets, shift confirmations or pay applications that back them.
  • ✓Your payroll register and recent tax deposit confirmations.
  • ✓An accounts receivable aging report.

What delays funding: invoices without client approval, payroll tax deposits that are behind, and an existing lien on your receivables.

Transparent Costs for Payroll Funding

What to Expect in CostsWhat Affects the Costs
Advance rate: 70%–90% of each approved invoice, paid up front.

Factoring fee: 1%–3% of the invoice, assessed when your client pays.

Reserve: the remaining 10%–30%, released after payment less the fee.		Client credit: stronger clients earn lower rates.

Payment terms: net-30 clients cost less than net-60.

Monthly volume: steady weekly billing earns a lower rate.

Recourse: non-recourse prices higher. See pricing.

Worked example: a $40,000 weekly invoice

LineAmount
Invoice face value$40,000
Advance at 85%$34,000
Reserve held (15%)$6,000
Factoring fee at 2%$800
Reserve released after your client pays$5,200
You receive in all$39,200

Illustrative example inside the published ranges. Your quote sets your actual advance rate and fee.

Payroll Funding vs. Bank Line of Credit vs. Merchant Cash Advance (MCA)

FeaturePayroll FundingBank Line of CreditMerchant Cash Advance (MCA)
Typical Approval SpeedSame dayEstimated 2–8 weeks1–3 days
Min. Credit Score RequirementNone: approval rests on client creditEstimated 650–700+ (owner personal)Estimated 500+ (owner personal)
Maximum Advance Rate70%–90% of approved invoicesVariable (% of collateral or assets)Estimated 70%–80% of monthly revenue
Debt Added to Balance Sheet?No: you sell a receivableYes: revolving debt liabilityYes: recorded as a liability
Hidden Fees / Covenants1%–3% fee disclosed up frontOrigination, maintenance, annual review, covenantsFactor rates, daily ACH debits, prepayment penalties (Variable/Estimated)
Best ForBusinesses with weekly payroll and net-30 to net-60 clientsEstablished companies with strong financials and collateralBusinesses with steady deposits and no invoices to factor

When payroll funding is not the right fit

  • ✗It costs more than a bank line over a full year. A 2% fee on invoices that pay in 30 days works out to roughly 24% a year if you fund every payroll this way. If you qualify for a bank line, it usually costs less.
  • ✗The first payroll needs lead time. A new account closes in 2–5 days, so payroll funding cannot cover a payroll due tomorrow on a brand-new account.
  • ✗Your clients see the arrangement. Each client receives a Notice of Assignment and pays the lending partner directly.
  • ✗A UCC-1 goes on your receivables. Article 9 of the UCC covers sales of accounts, so the filing can block other financing secured by the same receivables until the relationship ends.

How IFXI handles your request for payroll funding

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No long-term contracts

The lending partner’s factoring agreement has no long-term contract, so you can stop once client payments catch up with payroll.

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Transparent fees

You see the 1%–3% fee before you factor, so you can plan it into labor cost.

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An IFXI specialist on your request

An IFXI specialist reviews your quote request, gathers what is needed for approval, and forwards your file the same day.

Funding scenarios for payroll funding

Illustrative example · August 2026 · Houston, TX

Janitorial firm covers a new building

Funding Amount
$48,000
Industry
Commercial janitorial
Customer Type
Property management company
Funding Type
Payroll funding
Invoice Terms
Net-45
Advance Rate
85%
The Problem

A new office tower added 30 cleaners to weekly payroll, and the property manager paid on 45-day terms.

The Solution

The account was approved the same day and closed in 4 days. Once it was active, the firm factored each week’s invoice at 85%.

Result

$40,800 advanced. Every Friday payroll for the new building cleared on time.

Illustrative example · September 2026 · Pittsburgh, PA

Electrical contractor bridges draw timing

Funding Amount
$90,000
Industry
Electrical contracting
Customer Type
Commercial general contractor
Funding Type
Payroll funding
Invoice Terms
Net-60
Advance Rate
80%
The Problem

Two crews worked weekly at prevailing wage while the GC paid monthly draws 60 days out.

The Solution

Once the account was active, the contractor factored each approved pay application at 80%.

Result

$72,000 advanced. Both crews were paid weekly through the draw cycle.

Illustrative example · June 2026 · Orlando, FL

Home health agency pays clinicians

Funding Amount
$65,000
Industry
Home health care
Customer Type
Commercial health insurers
Funding Type
Payroll funding
Invoice Terms
Net-45
Advance Rate
80%
The Problem

Clinician payroll ran every two weeks while commercial insurer reimbursements took about 45 days.

The Solution

Once the account was active, the agency factored approved commercial insurance receivables at 80%.

Result

$52,000 advanced. Clinician payroll stayed on its biweekly schedule.

Where IFXI arranges payroll funding

We connect B2B businesses with invoice factoring in:
Texas, Florida, New York, Illinois, Georgia, Ohio, and Pennsylvania.
In Texas, see invoice factoring in Houston, Dallas and Austin.

Frequently asked questions about payroll funding

What is payroll funding and how does it work?

Payroll funding is defined as advancing cash against invoices so a business can meet weekly or biweekly payroll before customers pay. You sell approved invoices to the lending partner, receive 70%–90% up front, and receive the reserve minus a 1%–3% fee after the client pays.

The client pays the lending partner directly under a Notice of Assignment, and no debt goes on your balance sheet.

The short answer is to fund payroll from the invoices those clients already owe. Once your account is active, you receive 70%–90% of approved invoices within 24 hours, so wages go out on schedule while the client pays on its normal terms.

Yes, you can use invoice factoring to fund weekly payroll when you bill commercial clients with acceptable credit. Submit the week’s approved invoices once your account is active, and the advance arrives ahead of your pay date.

The short answer is that payroll funding sells invoices you already earned, so no loan balance or monthly payment is created. A payroll loan adds debt that you repay from future revenue, usually after a review of your own credit and financials.

The short answer is that funding a $40,000 weekly invoice costs about $800 at a 2% fee. At an 85% advance rate you receive $34,000 up front, then $5,200 of the $6,000 reserve after your client pays. Your fee sits between 1% and 3%, so it runs $400 to $1,200 on a $40,000 invoice.

The short answer is yes: each client receives a Notice of Assignment telling it to pay factored invoices to the lending partner. Under UCC §9-406, once your client has that notice, it settles the invoice only by paying as the notice directs.

The short answer is that a federal tax lien from unpaid payroll taxes gets a case-by-case review and does not rule you out on its own. Bring your IRS notices and any installment agreement to your request so the lending partner can review them.

Sources

General information about payroll funding. Rates, advance amounts and approval come from IFXI’s lending partner after its review and can change.

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