A New Type of Funding, Payroll Financing Helps Small Business Owners
You own a $3 million small business that has been really doing well and you just found out that your sales team landed 2 huge deals that will added $500,000 in sales to your top line, but you will have to get a $50,000 fund to deliver on those new sales. Another owner of a small business is trying to figure out how he is going to get $25,000 immediately to cover an unexpected expense for his liability issuance policy that was just increased. Another small business owner just found out from his best client that they are going to force him to accept 90 day terms from his normal 30 day terms causing the company to be short on cash for payroll.
These are all real life example of companies that are using a new way to obtain short term funds by borrowing money from companies that provide a new industry term called payroll financing (www.payrollfinancingsolutions.com).
Payroll financing companies fund money to business owners for payroll allowing the business going forward. These small businesses usually need a quick, short term fund of between $5,000-$100,000, the businesses usually have sales of $500,000 to $10,000,000, and show that their business is usually profitable. The fund is often intended to help a company thru a short period of time of less then 6 months or less and is usually issued in 48 hours.
In the past, the only way to get a quick, short term fund for a business owner was thru credit cards or friends/family and often, these really were not options. Not many business owners have a friend who can fund them $75,000 or who have enough credit cards ready to be able to take a large cash advance.
Payroll financing was designed because there was a need in the marketplace for micro funds that would be issued quickly and painlessly.
A payroll financing company might work closely with the small businesses payroll processing company, a professional employee leasing company, or a daily/weekly ACH to ensure that the fund is paid back but for the first time, there is an option for a small business that needs an emergency short term fund.
This article is written by Stephen Halasnik, Managing Partner, Financing Solutions
Financing Solutions (www.payrollfinancingsolutions.com) provides fast business funds of $5,000-$100,000 to good small businesses with sales of $500,000-$7 million that can be used for working capital.