Payroll Funding for Government Staffing Companies

Staffing is the most cash-intensive business in contracting. Your workers expect a paycheck every week or two, but the agencies and prime contractors you bill pay on Net 30 to Net 90 terms. Every active placement means you fund weeks of gross payroll, employer taxes, workers' comp and benefits before the first invoice clears.

Government work adds its own pressure. Service contracts covered by the Service Contract Labor Standards (FAR 52.222-41) require prevailing wages and fringe benefits from day one, and a new award can mean onboarding dozens of people before you can bill for them. Growth widens the gap. Payroll funding closes it.

Payroll funding, also called invoice factoring or A/R funding, means selling your outstanding client invoices to Encore for immediate working capital. It is not a loan. It is revenue you have already earned, available now instead of in 30 to 90 days.

• Apply. Share basic information about your business and an accounts-receivable aging report. You'll hear back within 24 hours.
• Onboard. Encore reviews your clients and contracts and, on federal work, files the Notice of Assignment. Most agencies are onboarded and funded within two to three weeks.
• Submit invoices after each payroll period. Encore reviews them, runs credit checks on new accounts and flags issues before they become cash-flow problems.
• Get funded. Encore advances up to 90% of invoice value directly to your account. Each invoice batch is typically funded the same day or the following business day.
• Encore collects. Clients remit to a lockbox processed within 24 hours. When the client pays, Encore reconciles the funds and releases your remaining balance, less the fee, with full reporting.

The funding mechanics are the same, but government receivables follow federal rules. Payment to a funding partner has to be set up under the Assignment of Claims Act, invoices move through PIEE (formerly WAWF) or the Treasury's IPP, and timing follows the Prompt Payment Act rather than a customer's habits. See how government contractors get paid for the full cycle.

When you staff as a subcontractor, the payer is the prime, so the prime's payment terms and credit matter. Encore underwrites the client paying the invoice, whether that is an agency or a prime, which is why fast-growing firms can qualify for more funding than a bank line would allow.

Funding covers the cash. The back office is where staffing firms lose the time. Encore operates as a virtual back office, handling payroll, invoicing, tax administration and compliance in your name:

• Payroll for W-2 employees, 1099 contractors and independent talent: time capture, approvals, deductions and disbursements.
• Payroll tax withholdings, quarterly filings, year-end statements and wage law compliance.
• Invoicing and collections: client-ready invoices in each client's billing format, cash application, dispute resolution and A/R follow-up.
• Reporting: dashboards for aging A/R, payroll summaries, collections activity and DSO trends, available 24/7.
• Integrations with leading staffing software and ATS platforms, so timesheets and job orders flow without double entry.

Encore has funded staffing firms for more than 30 years and three generations, with $35B+ in total funding provided and 455+ staffing firms supported. The team has funded clients through the BP spill, Katrina, 2008 and COVID, and doesn't pull back when conditions get hard.

That depth shows up in the details: funding structures built around your bill rates, payroll cycles and client mix; a dedicated account team; and the flexibility to support everything from a startup's first payroll run to an enterprise firm managing national MSP contracts.

Use the same checklist whether you compare Encore or anyone else:

• Advance rate and caps. Look for 80 to 90% of invoice value and a line that grows with billings instead of a fixed ceiling.
• Speed you can plan payroll around. Ask how long onboarding takes and how quickly each invoice is funded once you're active.
• Underwriting on your clients. Your agencies' and primes' payment strength should drive approvals, not only your balance sheet.
• Government experience. Assignment of Claims filings, federal invoicing systems and prime-sub payment terms should be routine.
• Clear pricing. One quoted fee structure, with every charge spelled out before you sign.
• Back-office depth. If you would rather not build a payroll and billing team, make sure the partner can run it.