Payroll Funding & Factoring FAQs

Encore offers either a funding-only package or a full-service package. Our clients elect which service level fits their needs best.

Funding-only is a solution focused on providing cash flow. Encore will purchase your outstanding invoices and transfer cash into your accounts so that you're able to make payroll as well as take care of other business expenses.

Additionally, we offer credit monitoring, collections, cash application, and treasury management services as part of our funding-only and full-service solutions.

Full-service allows our clients the time they need to focus on growing their business! Encore provides the cash you need to cover your payroll today. 

The special part of the full-service package is that Encore is also your back office. We take care of creating and submitting your invoices to your clients, processing your payroll, cutting your checks, and filing your payroll taxes

Payroll factoring and loans have different mechanisms and purposes. Payroll factoring involves selling invoices to improve cash flow, whereas loans involve borrowing money that needs to be repaid over time. Your choice between the two will depend on your business's specific financial needs, credit situation, and preferences.

Unlike secured loans, where lenders require you to pledge specific assets (such as property, equipment, or inventory) as collateral, factoring companies focus more on the creditworthiness of your clients (debtors) and the value of your invoices.

Some providers might have minimum volume requirements, but Encore works with staffing firms of all sizes, tailoring our services to their needs.

Factoring companies will assess factors, like the invoice amount, the invoice age, and the creditworthiness of your clients. Invoices from clients with strong credit are more likely to be eligible.

Average rates often fall between 1% and 5%, but this can vary widely depending on the specific factoring company you choose, the industry you're in, the creditworthiness of your clients (debtors), the size and volume of your invoices, and the terms of the factoring agreement. 

Yes, payroll factoring fees are generally considered tax-deductible business expenses.

In general, the application process is faster and less complex compared to traditional loan applications. But this can vary depending on the factoring company you're working with, the complexity of your business and invoices, and the completeness of the information you provide. At Encore Funding, we offer fast approval times, helping you get the funding you need in a timely manner.