Service companies
Cleaning, security, staffing and other service companies pay their people long before their clients pay them. Here is how to measure that gap and when funding it is the right call.
✓ Checking what you qualify for does not affect your credit score.
Updated October 13, 2026 · Merchant Fund Express
A service company’s biggest cost is labor, and labor is paid on a fixed schedule. Clients pay on their own terms, often 30 to 60 days after the invoice. Every new contract widens the gap, because you staff it weeks before the first payment arrives.
The size of the gap depends on three things: invoice maturity, payroll dates, and how much of your revenue comes from one or two clients.
If one client is 40% of revenue and pays late, the whole payroll is at risk. A funder reading your statements will see that pattern in the deposits. Before borrowing, list your top clients by share of revenue and their real payment days, not their contract terms.
| Client | Share of revenue | Terms | Actually pays |
|---|---|---|---|
| Client A | 38% | Net 45 | About 52 days |
| Client B | 22% | Net 30 | About 31 days |
| Client C | 14% | Net 30 | About 44 days |
| All others | 26% | Mixed | About 35 days |
A commercial cleaning company billing about $85,000 a month wins a new building contract worth $18,000 a month, net 45. It must hire and pay six people from day one. Payroll is about $9,000 per run for the new crew.
| Date | Event | Cash | Contract position |
|---|---|---|---|
| Jul 1 | Contract starts, crew working | $0 | $0 |
| Jul 12 | Payroll run 1, new crew | $9,000 out | −$9,000 |
| Jul 26 | Payroll run 2 | $9,000 out | −$18,000 |
| Jul 31 | First invoice issued | $0 | −$18,000 |
| Aug 9 | Payroll run 3 | $9,000 out | −$27,000 |
| Aug 23 | Payroll run 4 | $9,000 out | −$36,000 |
| Sep 6 | Payroll run 5 | $9,000 out | −$45,000 |
| Sep 14 | July invoice paid, about day 45 | $18,000 in | −$27,000 |
| Sep 20 | Payroll run 6 | $9,000 out | −$36,000 |
| Oct 14 | August invoice paid | $18,000 in | −$18,000 |
The contract consumes up to $45,000 before the first payment arrives, and it stays negative for months. Supplies and payroll taxes are not even in the table yet. That is the real cost of growth on net 45 terms.
All figures in worked examples are illustrations of the arithmetic, not offers or quotes. Real terms depend on your file and the funder.
Sometimes renegotiating to net 15 or 30, invoicing every two weeks, or asking for a mobilization payment fixes the gap without funding.
If clients pay reliably but slowly, invoice factoring advances against invoices. If you want to keep clients out of it, working capital or a line of credit read on your own deposits fits. Check your file against our published tiers. For industry detail, see the cleaning, security services and staffing agency hubs, and the general payroll gap page.
Then start the application, or check fit first without affecting your credit.
Yes, if your existing deposits can support the payment. The new contract helps the story, but the file is read on your bank activity today.
Factoring suits reliable but slow clients and involves them. Working capital is read on your own account and keeps clients out of it.
It can. Heavy reliance on one client is visible in the deposits. Explaining the relationship and its payment history helps.
Decisions on complete files are typically same day, with funding in as little as 24 hours for qualified businesses. Apply well before the payroll date.
Same-day decision. Applying takes a few minutes and will not affect your credit score.
