Is your medical staffing company trying to qualify for payroll funding? The qualifying process for medical staffing payroll funding can be boiled down to three main components.
Three Ways to Qualify For Payroll Funding
1. Staff at Creditworthy Facilities
Business owners should try to only provide staff for medical facilities that are accredited and widely known. Why? Companies that are known to run well, have large campuses or are recognized by a medical board most likely have a good enough income to pay the factoring company on time. When you sell your unpaid invoices, that medical company is going to have to pay them back. If they have a good credit history, you’ll most likely be approved for funding.
How to tell if a facility is creditworthy
Most medical staffing payroll funding companies will provide payment terms and a credit report prior to extending credit to a new debtor. If they do not:
– Research the facility’s payment terms. A quick call to the accounts payable department will tell you a lot about the company. Make note of how long it takes them to pay their vendors. If they’re upfront about their turnaround times and are knowledgeable when you ask questions, you’re most likely talking with a reputable company.
– Ask around. If you know other vendors who are providing staffing at the facility, ask them how long it takes them to get paid. Make sure to inquire if they get paid on time or if the company is late.
– Use a third-party credit bureau. There are several companies that can and will provide you with credit reports for a business for a small fee.
3. Stay on Top of Payroll Taxes
If your medical staffing agency wants to qualify for payroll funding, you need to prove you’re reliable. Pay your employees and your payroll taxes on time.
If you don’t pay your employees, they most likely aren’t going to stick around for long. Reputable companies aren’t going to want to work with you if you don’t have reliable employees, and factoring companies aren’t going to want to provide payroll funding for you if reputable companies don’t want to work with you.
If you don’t pay your payroll taxes, your business is going to have problems with the IRS. Not paying taxes is considered theft of government funds. Factoring companies aren’t going to provide payroll funding to your business if it is negatively involved with the IRS.
3. Have Unsold and Unpaid Invoices
The last step in ensuring your business qualifies for payroll funding is to be sure your receivables have not already been sold to another lender or used as collateral. Your invoices can be sold to one company at a time.
When a funding company enters into a financing relationship with a staffing agency, it places a lien on the agency’s receivables. Placing a lien on receivables lets other financing companies know that one particular payroll funding company already owns the invoices.
