Funding FAQ

Incorporating Payroll Funding into your Staffing Agency Business Model Increases Profitability 

Funding Truths

Madison is the most dedicated staffing-specific outsourced service provider in the market. Madison is the only provider that owns all its own technology, has a full-time development staff delivering new technology regularly, and is owned and managed by staffing industry executives. We know your business and are dedicated to helping staffing companies become more profitable.

We are more than a funding source. We are your partner. We believe that the companies that will succeed and be recognized in the future will be those that are focused on their core skills and outsource all their non-core activities. We can provide the tools and technology that the largest staffing companies typically have to give them the advantage. We will level the playing field for you!

Payroll Funding 101

What is payroll funding, and how does it work?

In staffing, the most basic type of payroll funding is through asset-based lending, secured by your receivables. The funder will cover a percentage of your payroll based on submitted timecards. With the right level of funding, you are assured that your contractors will be paid no matter what. Generally, lenders will fund a percentage of your invoice instead of just your payroll. This percentage can vary from 75% - 100%.

How is payroll funding different than a loan?

Payroll funding is flexible. Approval is based on the creditworthiness of your customers. This allows a funding company to fund startup businesses and other rapidly growing companies that often find themselves unable to acquire the capital that they need. Banks typically examine a company and its personal guarantors in great depth. This examination usually requires three years of financial statements, a cash flow analysis, and collateral appraisals. This can take weeks, even months, to complete. If a business is fortunate enough to obtain a line of credit, that line is typically for a fixed amount. More often than not, this finite borrowing capacity limits that company's growth.

How do I choose a payroll funding company?

Do your diligence - look for a company that caters to your industry and understands your business. Get details on all of the services available and read the fine print. For example, how much of the payroll will they fund? Do the fees increase as invoices age? When do you have access to your profits? These are questions that should be answered before you make a final decision.

 

Funding with Madison is different.

What is Madison Resources' complete service offering?

The following (and more!) is covered under one, easy-to-decipher fee:

Operational Support

  • Payroll Processing
  • Payroll Tax Filing & Reporting
  • Billing, Credit & Collections
  • Cash Applications
  • Annual W-2 Processing

Technical Support

  • Online Time Sheets & Payroll Stubs
  • Online Payroll Processing (OPP)
  • In-house Development Team
  • ATS / CRM*

Business Intelligence

  • Madison Online Solutions (MOS)
  • Performance Analytics
  • Expert Advice

* Our ATS / CRM was explicitly built for staffing.

What Business Intelligence do you provide?

Madison provides tools that will change how you look at your business. Our Performance Analytics Module contains a well-thought-out level of detail. Tailored specifically to the demands of staffing companies, below are just a few of the features of the Performance Analytics Module that will help your staffing firm become more profitable:

Visibility

Drill into key data, including tax withholdings, benefits accruals, employee hours, and bill rates. While using Performance Analytics, you're able to get as granular as your business warrants. Once logged in, you will be presented with easy-to-read graphs representing Sales, Gross Margin, Profit, Headcount, Markup, and Aging at a glance.

Easy Reporting

The tool provides you with a separate income statement, balance sheet, and cash flow statement, which can be easily exported to Excel.

Customize And Compare

In order to increase profitability, it is necessary to analyze your data. Customize your view to compare your data week to week, month to month, or year to year. With this breakdown, opportunities and trends are more easily found. Coupled with our Madison Online Solutions (MOS) and expert advice, Madison provides the resources you need to become more profitable.

I've worked with my local bank for years; why should I switch to Madison?

Working with Madison is easy. You'll find fewer restrictions, no rigid reporting requirements, and more flexibility, and we fund your business at 100%. Based on the good credit of your clients, our funding is unlimited.

What is the difference between a PEO and Madison?

Because PEOs typically do not provide funding, Madison can work alongside them to help you. With Madison, you are the employer of record and maintain control of your contractors and clients. Conversely, a PEO immediately becomes the employer of record and gains full control of your employees and clients. Businesses that wish to move away from a PEO relationship will often find themselves at a disadvantage as they are considered a new employer in the eyes of workers comp carriers, regardless of the number of years in business.

Do you work with startups?

Yes. Startups love partnering with Madison! We allow new staffing firms to focus on sales and recruiting while we take care of non-revenue-generating, compliance-laden tasks. We save the startup many thousands of dollars by not having to purchase systems and software. As a result, startups grow faster with Madison.

Do you assign a representative exclusively to our account?

We'll do you one better than that. Every client has their team assigned to them. Your team consists of a representative from billing, payroll, collections, cash application, and accounting. So you have an accessible team of professionals with expertise in their field supporting you and your business.