Staffing Payroll Funding Agreements & Factoring Company Contracts; Timing of Presentation of the Fine Print

A variable that can affect the ultimate funding cost you pay is the timing of the presentation of all the payroll funding contract fine print. The timing of presentation/completion of funding documents you are to sign may be strictly procedural, nothing more than a bureaucratic process. It could also be timed to the funding company’s advantage.

To get set up and funded somewhere you can spend a lot of time making and returning phone calls and e mails, filling out applications, and getting familiar with the funding or factoring company’s procedures. It is possible that weeks of discussion have gone by and the payroll funding company hasn’t provided a completed contract and ALL supporting agreements and addendums to you.

With some funding companies, by the time the staffing agency owner actually gets to see the fine print he or she has wasted too much time. Because of the way their business is already flowing, or to meet all of their new business commitments, goals and deadlines, they may have to throw in the towel and accept the terms delivered at the final hour. They really don’t have the time or additional energy to scrutinize, understand and object to the last-minute surprises in the fine print. Or, faced with the objectionable and unilateral payroll funding contract language, they must put their business desires on hold and start over with another payroll funding company.

One way that some funding companies get around objectionable fine print and/or sneak in extra costs, expensive floats, and severe legal teeth is to initially provide (when you first asked to see the fine print) just a portion of what will be the final documents. They may show you the funding agreement but not the personal guaranty. They may not include the power of attorney you must sign. There could be one agreement called "factoring agreement terms and conditions" and at the same time another agreement called a "factoring master agreement" - both controlling how funding works at all times and how it works when you want to terminate.

Make sure you see samples of ALL final documents you will need to sign for the payroll funding or factoring company in a reasonable window of time before you must sign. Other examples of document "combinations" (and individual parts) around the funding industry include:

Revolving Line of Credit and Security Agreement
Promissory Note for Multiple Advances
Continuing Guaranty Agreement

Purchase and Sale Agreement
Exhibit A Schedule of Accounts
Guaranty
Acknowledgement and Representation

Accounts Receivable Security Agreement
Schedule of Fees
Addendum to Contract
Account Funding and Administration Agreement
Continuing Guaranty and Waiver

Funding Agreement-Master Agreement
Accounts Receivable Security Agreement
Schedule A Schedule of Fees Charges and Agreement Term
Schedule E Miscellaneous

Accounts Funding Agreement
Continuing Guaranty
Selective Business Security Agreement
Subordination and Stand-By Agreement

Master Funding Agreement
Master Draw Agreement
Security Agreement
Continuing Guaranty
Lockbox Agreement

Administrative Services & Accounts Funding Agreement
Security Agreement
Promissory Note
Continuing Guaranty
Lockbox Agreement
EDT Electronic Data Transmission Agreement

Accounts Receivable Funding Program and Procedures
Loan Agreement