Funding Solutions To Unlock Unpaid Receivables
Transform your unpaid invoices into working capital with our customizable funding solutions, offering a stress-free alternative to traditional loans and credit lines. You receive the funds you've earned, and we take pride in supporting your business growth — it's that simple.
What Is Paychex Funding Solutions?
Paychex Funding Solutions provides quick access to growth capital based on your company’s assets through invoice factoring and inventory factoring. We customize the contract to meet your specific business needs. It's a solution for payroll, vendor payments, and growth reinvestment.
Accounts Receivable (Invoices):
- Bridge cash flow gaps by unlocking capital from unpaid invoices
- Access uncapped, flexible funding
- Full-service invoice management and support
- Advance rates up to 90% (A/R)
Inventory:
- Access working capital from idle inventory to manage today’s expenses and fuel tomorrow’s growth
- Solutions tailored to fit small business needs
- Access uncapped, flexible funding
- Advance rates up to 100% (A/R)
Empowering Diverse Industries and Growth Stages With Invoice Factoring
Industries We Serve
- Manufacturing
- Wholesale/Distribution
- Transportation
- Staffing Services
- Onsite Security Services
- Hospitality
- Agriculture
- IT/SaaS Services
- And more
Am I Eligible for Invoice Financing?
- B2B or B2G sales
- Small to medium businesses
- Startups or new subsidiaries
- Rapid growth or recovery
- Seasonal revenue dependency
A Funding Partner for the Long-Term
It’s no secret that traditional business banking products offered by financial institutions are designed to meet a rigid set of parameters. We understand that running a business requires flexibility, and that’s where our funding solutions can help.
What Sets Us Apart
- Choose your contract terms and receivables
- No personal guarantees or financial statements required
- No hidden fees
- We rely on the creditworthiness of your customers rather than your business
- Backed by the financial power of Paychex, paying 1 in 12 American private sector workers
Personalized for Your Business
- One-on-one consultation to swiftly evaluate business goals and finances
- Ongoing access to a flexible, collaborative funding specialist for customized solutions
- Simple contracts for confidence and quick action
- Quick funding to maintain business momentum
- Full-service team to offer insightful guidance and support
Apparel Printing Company Meets Seasonal Demand with Receivables Financing
Challenge
A growing apparel printing company with seasonal business faced strained cash flow due to long overseas supply lead times and extended customer payment terms.
Solution
With a 90% advance on receivables, Tukes purchased more supplies to meet demand, maintaining supplier and customer relationships. Paychex Funding Solutions helped Tukes manage accounts receivables, helping maintain its reputation for quality and timely delivery during a critical growth phase.
“We talked to more than five lenders, including banks and big factoring firms. None would consider the transaction—our business was either too young or our total funding request was too small. We were stuck in the middle without an option until Paychex introduced us to their funding solutions team. They funded our unpaid invoices and managed payment arrangements with our customers.”
You Have Questions, We Have Answers
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What Is a Factoring Company?
What Is a Factoring Company?
A factoring company provides funding services where businesses sell their accounts receivable (invoices) at a discount to obtain immediate working capital. Factoring companies buy these invoices and then collect the full amount from the client’s customers, taking on the risk of non-payment and the collection responsibility.
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How Does Invoice Factoring Work?
How Does Invoice Factoring Work?
Invoice factoring involves a business selling its outstanding invoices to a factoring company. To improve cash flow, the factoring company pays the business an advance, typically 70% to 90% of the invoice value. Once the factoring company collects the full payment from the debtor, it will pay the remaining balance to the business minus a fee for the service provided.
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How Much Does Invoice Factoring Cost?
How Much Does Invoice Factoring Cost?
The cost of invoice factoring can vary depending on the volume of invoices, the creditworthiness of the customers, and the industry. There are two main types of fees: discount fees and service fees. Typically, discount fees range from 1% to 5% of the invoice value. Service fees are administration fees that a factor charges for processing and managing invoices, usually ranging from .5-2.5% of the invoices factored. These fees may be structured as a flat fee or vary according to how long the invoice remains unpaid.
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Is Accounts Receivable Factoring a Loan?
Is Accounts Receivable Factoring a Loan?
No, accounts receivable factoring is not a loan. It is a financial transaction where a business sells its accounts receivable (invoices) to a third party (a factoring company) at a discount. This arrangement provides immediate cash to the business but does not create debt on the company’s balance sheet.
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What Types of Businesses Use Invoice Factoring?
What Types of Businesses Use Invoice Factoring?
Invoice factoring is commonly used by businesses with long invoice payment terms that quickly need cash to manage operational expenses. Industries that typically use factoring include manufacturing, wholesale, transportation, staffing agencies, and construction.
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How Long Does the Funding Approval Process Take?
How Long Does the Funding Approval Process Take?
The approval process for invoice factoring can be much faster than bank loans. It often takes just a few days to complete, as the main concern for factoring companies is the creditworthiness of the invoiced customers, not the business applying for factoring.
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How Quickly Can My Business Receive Funding?
How Quickly Can My Business Receive Funding?
Once approved, businesses can receive funds from invoice factoring within 24 to 48 hours of submitting their invoices. This quick access to capital is one of invoice factoring's primary advantages.
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When Should I Start Factoring?
When Should I Start Factoring?
A business should consider inventory or receivables factoring when it needs immediate cash flow to cover operational costs, take advantage of growth opportunities, or stabilize its financials without taking on debt. Factoring is also beneficial when a business frequently deals with customers with lengthy payment terms or experiences rapid growth that outpaces its cash reserves.
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What Types of Funding Are Available Through Paychex Funding Solutions?
What Types of Funding Are Available Through Paychex Funding Solutions?
We offer receivables funding with up to 90% advance rates and inventory funding with advance rates of up to 100%. This means we can cover a significant portion of the money you are owed or inventory costs, helping you maintain and expand operations without interruption.
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What Makes Paychex Funding Solutions Different From Bank Loans?
What Makes Paychex Funding Solutions Different From Bank Loans?
Unlike traditional bank loans, which often have inflexible approval processes and restrictive loan covenants enforced by regulatory laws, Paychex Funding Solutions offers a high degree of flexibility without requiring personal guarantees or detailed financial statements. Our funding decisions are based on your customers' creditworthiness, allowing us to serve businesses that might not qualify for traditional loans.
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Are There Any Fees Associated With Paychex Funding Solutions?
Are There Any Fees Associated With Paychex Funding Solutions?
All fees are disclosed upfront before you sign any agreements. There are no hidden costs, providing transparency and trust from the start of our relationship.
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What Happens if a Customer Doesn’t Pay an Invoice?
What Happens if a Customer Doesn’t Pay an Invoice?
Our service includes managing payment arrangements with your customers and helping ensure that all purchase orders are honored. By providing timely payments, we can help enhance your relationships with suppliers and customers.
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Are Factors Predatory Lenders?
Are Factors Predatory Lenders?
In general, no. Factoring companies provide a legitimate service to many underserved businesses needing funds. However, not all factoring companies are created equal, and some of the more short-sighted resort to misleading customers. Paychex Funding Solutions champions transparency, accessibility, risk management, and trust in the pursuit of helping businesses access working capital.
Customized Funding Solutions for Your Business
Take the simplest step toward addressing business cash flow challenges — request a no-obligation consultation with one of our funding specialists.