Can a new staffing agency get factoring?

Published 2026-10-28 · Timecard Capital · Nothing here is gated and nothing here is an offer.

Short answer

Yes. A new staffing agency can open a factoring facility at Timecard Capital with 3 months in business, $20,000 in open invoices to business clients, and no minimum credit score. That is a lower bar than almost any other form of business funding, and it is low for a structural reason: the thing being underwritten is not the agency.

Why a new agency can qualify when a bank says no

A bank lends against the borrower. It wants two years of tax returns, a balance sheet with equity on it, and a personal credit score to match. A three-month-old agency has none of that, however good its contracts are.

A factor buys the invoice. The question is whether the client named on it will pay: is the hospital system, the distribution center, the school district, the manufacturer a creditworthy business that pays its vendors? If it is, the invoice is good, whoever raised it. The age of the agency and the owner’s FICO do not change whether a hospital pays its bills.

This is why a new agency with one strong client is often a better factoring file than an established agency with a dozen weak ones.

What a new agency needs to send

New-agency factoring checklist

Item	What it tells the underwriter
Four-minute application	Entity, EIN, owners, what the money is for
A/R aging report	Who owes you what, and how old each invoice is
Client list	The businesses whose credit will be run
Sample invoices and approved timesheets	That the receivable is real, billed, and backed by accepted hours
3 months of business bank statements	That payroll is actually running through the account
Client contract or PO, if you have one	Terms, rates, and whether a VMS is involved

Not required: tax returns under $500,000, a business plan, collateral, or a minimum personal credit score.

What trips up a new agency, and how to avoid it

• Unbilled hours. Only issued invoices can be factored. If your workers have been on site three weeks and you have not invoiced yet, bill first. The $20,000 minimum is in open invoices, not in hours worked.
• Contingent placement fees. A direct-hire fee inside its 60- or 90-day guarantee period is not a factorable receivable. Contract and temp invoices are.
• Invoices already pledged. If another lender has a UCC filing on your receivables, say so up front. It can often be bought out or subordinated, but it has to be known.
• One client at 100%. Not a decline reason for factoring — the limit is simply sized to that client’s credit. It becomes a question later, on a line of credit or SBA.
• Consumer clients. Factoring is a B2B product. Invoices to individuals cannot be factored.

What the first facility looks like

The facility opens in 3 to 5 business days on a complete file. From then on you submit each week’s invoices and up to 90% lands in your account within 24 hours. On a $60,000 invoice that is $54,000 up front; when the client pays at day 45, at an illustrative 2.5% per 30 days, the $2,250 fee comes out of the $6,000 reserve and $3,750 is released. An illustration, not an offer.

The limit is set by your clients’ credit and your invoicing, and it grows as billing grows. A new agency that doubles in its first year does not have to re-qualify; it just submits more invoices.

What to do if you are under 3 months or under $20,000

If the agency is younger than 3 months or the open invoices are under $20,000, the honest answer is to bill your first month and come back — the gap closes fast once placed workers are on timesheets. If there is a cost that cannot wait, such as a workers’ comp deposit, working capital needs 6 months in business and $15,000 a month in deposits with no minimum FICO. Call and we will tell you which line you are closest to.

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Related: Invoice factoring · How payroll funding works · Working capital · What you need to apply.