Commercial janitorial, residential, specialty
Cleaning company financing for payroll between contracts
Cleaning companies are labour-heavy businesses with net-30 or net-60 commercial customers, which means payroll goes out weekly against invoices that pay monthly. Most cleaning files are solved with working capital or invoice factoring sized to one payroll cycle. Six months in business and $10,000 in monthly deposits is the entry bar.
Winning the contract is the expensive part
A new commercial cleaning contract is good news that costs money. You hire and train crew, buy equipment and supplies for the site, and staff it for a full month before you invoice — and then wait another 30 days to get paid.
So growth in this industry consumes cash. The company that wins three new buildings in a quarter has a harder cash position than the one that wins none, right up until the receivables start cycling.
Labour is the whole cost structure
Payroll typically dominates a cleaning company's expenses. That has two consequences for financing. Any cash flow gap immediately becomes a payroll problem, which is the least deferrable expense there is. And because there are few hard assets, there is almost nothing for a traditional lender to secure against.
Revenue-based funders and factors do not need hard assets. They read deposits and receivables, which you do have.
Residential and commercial behave differently
Residential cleaning collects at or near the time of service, often by card, which produces steady visible deposits and a clean underwriting file. Commercial janitorial invoices net-30 or net-60, which produces a receivable and a gap. Companies that do both tend to underwrite well because the residential revenue smooths the deposit pattern.
What usually fits
Working capital
A lump sum repaid on a fixed schedule. The default answer when you need money for a specific thing with a known end date.
FastestMerchant cash advance
A purchase of future receivables, repaid as a share of daily sales. Fast, expensive, and the right tool less often than it is sold.
Most flexibleBusiness line of credit
Revolving credit you draw and repay as needed. Costs less over a year than repeated lump sums for the same problem.
For slow-paying customersInvoice factoring
Sell your receivables at a discount and get paid now. Usually cheaper than an advance when the problem is slow-paying customers.
If the gap is caused by slow-paying commercial customers, factoring is often the cheapest answer because it advances against invoices you already earned. If the need is equipment for a new site or a one-time hiring push, working capital sized to a single cycle fits better.
What funders look at in this trade
| What they check | What helps you | What hurts you |
|---|---|---|
| Deposit consistency | Regular monthly deposits from recurring contracts | Erratic deposits or a declining trend |
| Customer concentration | Several commercial accounts | One contract producing most of the revenue |
| Contract documentation | Signed service agreements with terms | Handshake arrangements with no paper |
| Receivable aging | Under 60 days | Heavy over-90 balances |
| Payroll structure | W-2 with visible, regular payroll debits | Large cash payments to workers |
| Insurance and bonding | Current, documented | Lapsed coverage — a hard stop for commercial work |
What this looks like in practice
A commercial janitorial company with 22 part-time employees, in business four years, averaging $61,000 a month in deposits across nine building contracts.
They win two new buildings starting the first of next month. Staffing, training, equipment and supplies for both sites come to about $38,000, and the first invoice for those buildings will not be paid for roughly 60 days.
The file's strength is the recurring contract base — nine buildings paying monthly is a visible, predictable deposit pattern, and no single customer dominates it. That diversification matters more to a funder than the total.
The cleanest structure here is one that repays as the new receivables cycle in, rather than a lump-sum advance amortising against the existing book. The new contracts are the repayment source; the structure should reflect that.
Signed service agreements for the two new buildings belong in the file. They convert this from a general working capital request into a documented, dated one.
Example only. Actual rates, terms and outcomes are set by the funding partner and depend on your business.
Documents to have ready
- Three months of business bank statements as PDFs
- Signed service agreements for major contracts
- Accounts receivable aging report
- Certificate of insurance and bonding documentation
- Payroll summary or provider reports
- Voided check, EIN letter, driver's licence
Straight answers
Most of my customers pay net-30. Can I get funded on that?
Yes, and it is the classic case for invoice factoring. A factor advances most of the invoice value within a day or two of you issuing it, then collects from your customer. It is generally cheaper than an advance for an ongoing receivable gap.
One customer is most of my revenue. Is that a problem?
It is the most common reason a cleaning file gets repriced. Concentration means one lost contract takes most of your revenue with it. It rarely stops a deal outright, but expect a smaller offer and a higher rate than a diversified book would get.
I pay some workers in cash. How does that affect underwriting?
It creates two problems. Cash payroll that does not run through the bank makes your expense picture unclear, and it raises compliance questions a funder would rather not inherit. Files with clean W-2 payroll and visible payroll debits underwrite considerably better.
Can I finance equipment for a new site?
Yes. Floor machines, extractors and vehicles all finance as equipment, which usually prices better than working capital. If the request combines equipment with hiring and supplies, splitting it into two structures often costs less than one facility covering both.