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What a Business Needs to Qualify For Payroll Funding

payroll fundingBusiness that are looking for payroll funding often have many questions in regards to if they qualify and how it works. Payroll funding is short term financing for small businesses similar to an unsecured fast business loan. It is approved  based on the viability of your business to be able to pay the funding back. Financing Solutions provides funds so that a business can make payroll due to an emergency situation usually due to a delay in account receivable or due to an unexpected expense. You are borrowing money against your business and it has nothing to do with borrow money against your employees paycheck.

How a business qualifies?

A business qualified for payroll funding based on a series of questions that a FS Managing Partner will ask. The questions relates to the business’ financial history, the industry you are in, and reasons why you need to funds. These 20 minutes of questions are the bases for if you will be approved. Once approved, backup documentation will be required. The whole process to be approved will be 30 minutes and funding can occur in 24 hours or less if needed. If a business owner is worried about being approved the best bet is to look at your business and be able to prove that your business will eventually have the money to pay back the funding provided. The best thing about Financing Solutions is that unlike a bank, we are all business owners and will understand your business better.

How do you prepare for the interview?

There really isn’t much you need to prepare for. As the business owner you will know all the answers to the questions asked. However, it probably is a good idea to look at your income statements for the current and past year and know what your sales and net profit are. These are both questions that will come up. It is also critical that you are honest with the questions because if you get approved, you will be asked for backup documentation at a later time.

How does Funding work?

Once the money is wired into your account there will be a small business day low payment ACHed out of your banking account to pay the funding back. If you decide that you would like to pay the funding off early, you will have that option as well.  Of course if you can get a business line of credit from a bank that is the cheaper way to go but those type of loans take a long time to get and are very hard to qualify for. Traditional AR factoring is more of a long term financing solution and is very expensive in the long run. Funding is inexpensive due to the fact that you are paying the funding back over a short period of time and then often going back to normal cash flow operation of lining up a bank business line of credit for the future.

 

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