What Is A Payroll Loan?

Sudden hurdles are an inevitability in business, whether you suddenly need to bring on another member of staff, a vital piece of equipment breaks, or you incur any sort of expense that needs funds you don’t necessarily have at the moment. Bank loans are notorious for taking a great deal of time to process, so they aren’t a match. Several other alternatives for unexpected expenses have arisen, one of which is payroll lenders.

Payroll lenders provide short-term loans designed for unexpected expenses that take place between the times you get paid. This leads to their other common name of payday loans. These loans generally are for a small amount of money, up to roughly $1,500, but you can have access to funds as quickly as the next business day. Requirements are relatively low.  Some payroll lenders need some recent pay stubs or bank statements. These prove that there is a steady income coming in. The due date for the full amount, plus any fees, is the next time the borrower gets paid.

While these may prove to be a useful tool, payroll loans carry their own set of issues. Therefore, it’s important that you know the positives and negatives about them before you decide to use them.

Weighing Pros and Cons

The largest concern about payroll lenders and loans, by far, is the fees and rates that apply to them. They generally carry a very large APR rate, often between 15% and 30%. In addition, if you are not able to make the payment when the loan is due, you will incur other hefty fees, as well as even possibly a higher interest rate. Going into a payroll loan without knowing the details can leave you in worse financial condition than when you started. To avoid this, be sure to do your research not only on potential lenders but on your own financial status as well. Make sure you know exactly how much you will be paying, and be sure that your paycheck will be enough.

The versatility and speed of payroll loans make them appealing to business owners in a jam. At the same time, due to some of the high rates and fees associated with them, they can make a poor choice in times of desperation. This doesn’t mean that they are bad, but you want to be sure your money is in order before you try to go through with one. In additions, there are some alternative funding options out there with similar benefits to payroll loans, but with less risk                                                                                                     

What To Do Without Payroll Lenders

eBusiness Funding helps businesses that may struggle with traditional lenders. To do this, we provide merchant cash advances, which are available to many business types. 95% of businesses that meet our simple requirements qualify for funding. All you need is to be in business for at least six months, with over $10,000 in monthly revenue. With us, it’s not about past credit history or collateral, but about your business’s potential.

It’s important to us that you use the funds we offer in the most helpful way possible, so we place no restrictions on how you spend our advances. Payroll, expansion, repairs, spend on what you need! We also get you your funds fast, sometimes as soon as 72 hours after you first apply. Repayment is also very simple. Rather than large monthly payments, we take an established percentage of your future sales. This is set up by our skilled consultants. This percentage stays the same, so if business slows down, you pay less.

Interested? If you’re ready to begin, all you need to do to start is fill out this simple contact form. We’ll be waiting, and are looking forward to helping your business get the funding support it needs.

What is Payroll Financing

Funding payroll is never easy when you have to live paycheck to paycheck. In some cases, you can be a completely stable company with a long list of clients but if your clients don’t pay you back on time it can be hard to make payroll. Not to worry, there are options for payroll financing out there that will let you say goodbye to slow paying customers.

Slow paying clients don’t make things easy on anyone. What is worse is a slow paying employer. Imagine being an employee and needing to earn your paycheck in order for your family to eat. And now imagine as a manager you have to tell them sorry I can’t pay you. That is not a conversation any small business owner wants to have to have and is a quick way to lose a good employee.

There are several options for payroll financing depending on what your business is truly looking for.

Factoring

Factoring is an option that business owners can use when funding payroll. It allows them to utilize their unpaid invoices as collateral. Essentially the business owner can sell their unpaid invoices to a payroll funding company in exchange for a cash advance. This allows you to stay ahead of payroll at all times.

There is a catch, the cash advance will typically be anywhere from 20 to 25% less than the value of the invoice. Depending on the amount of the invoice and the credibility of the client, some payroll funding companies will pay up to 95% of the face value of the invoice. This will depend on a variety of factors. Because payroll funding companies are taking a risk that the invoice will get paid back, this is their insurance method.

Payday Loans

A payday loan allows a borrower to write a check in the amount of the payroll plus the lender’s fee. The borrower will then give the check to the lender, who will give them the amount of the check minus the fee, in cash (typically). The lender agrees to not cash the check until a pre-determined time.

The fees on this type of payroll financing can vary based on the lender. Some lenders will charge a specific percentage of the payroll. Others will charge a flat fee in addition to a percentage for every dollar advanced.

If you are considering a payday loan, make sure you read the fine print before signing the contract.

Merchant Cash Advance

A third option for payroll financing is a merchant cash advance. This type of funding allows businesses that qualify to be advance money in exchange for a fixed percentage of their credit card transactions. This percentage is taken daily until the advance has been paid back in full. Just like the previous two options, this type of payroll financing does have fees associated with it.

A merchant cash advance can get you funding in just three days. The process is simple. Apply with a simple form. Our team will then review your application and you will hear from us in just 24 hours. We will let you know what you are approved for which can be anywhere from $5,000 to $500,000 based on a few criteria. Just three short days later, you will have the cash directly deposited into your account. How does that sound?

A merchant cash advance account is a great option for payroll financing. But we also know it is not right for everyone. It is also important for you to understand the differences between the different funding sources. If you have clients that aren’t paying you back as quickly as you would like and you need payroll financing, contact us! We can help you determine what option is right for you.

Ready To Get Started?

Contact eBusiness Funding now at 305-985-6593 or complete the contact form on this page now.