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Medical Staffing Companies - How to Qualify for Payroll Funding

Guest post by: Phillip Cohen

Article Overview: Unlike with more traditional lenders, it’s not hard to qualify for medical staffing payroll funding. In fact, there are three key components to qualifying for medical staffing payroll financing: (1) Business owners should only staff at creditworthy medical facilities; (2) Agency owners need to make sure that their payroll taxes are paid; and (3) The medical staffing receivables cannot already be pledged as collateral to another funder.

Medical Staffing Companies - How to Qualify for Payroll Funding

Step One: Staff at Creditworthy Facilities

The first step in the factoring medical staffing payroll approval process is for business owners to work with creditworthy medical facilities. Payroll funders require this step because in the end, they will receive payments from the medical facilities. How does one know if a facility is creditworthy? There are a number of things a business owner can do:

1. Research the facility's payment terms. A quick call to the accounts payable department will tell you a lot. Don't be afraid to ask the clerks how long it takes for them to pay their vendors. Most A/P Departments will be upfront with their turn-around times.

2. Ask around. If you know other vendors who are also staffing at the facility, ask them how long you should expect to wait before you will be paid.

3. Use a third-party credit bureau. Experian, Dunn & Bradstreet, and Equifax all offer credit reports for a fee. If it's important to you to get paid on time, paying for these services are well worth it.

**NOTE: Most medical staffing payroll funding companies will do all three of these steps for agency owners prior to extending credit to a new debtor.

Step Two: Stay on Top of Payroll Taxes

There are two things that a medical staffing agency should always pay on time-their employees and their payroll taxes. Let's be honest, business owners who don't pay their employees on time won't have employees for very long because people expect to get paid when they work.

Moreover, business owners who fall behind on their payroll taxes won't stay in business for very long because at some point, the IRS will come after the business for those funds. In fact, not paying payroll taxes is considered to be theft of government funds. Once the IRS finds out that a medical staffing business owner has not been paying its payroll taxes, the governmental entity will charge hefty fees and start seizing the company's collateral in order to settle the debt.



Step Three: Keep Receivables Free and Clear

The last step in the medical staffing payroll funding process is to be sure that the agency's receivables have not already been sold to another lender or have not already been used as collateral in another financing arrangement. When a medical staffing payroll funding company enters into a financing relationship with a staffing agency, it places a lien on the agency's receivables.

Filing a lien on the agency's receivables does two things: a) It tells other financing companies that the payroll funder already owns the receivables, and b) It protects the medical staffing payroll funding company in the event that the agency closes its doors because the funder can continue to collect on the agency's receivables.

Qualifying for a line of credit via a traditional lender is a difficult and time-consuming process. However, qualifying for medical staffing payroll funding is just the opposite. In most cases, if all three of the above conditions are met, then a medical staffing agency can be approved for payroll funding.

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Article Tags: factoring medical staffing payroll, medical staffing payroll financing, medical staffing payroll funding



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