What To Do When You Need Payroll Funding
When it comes to business expenses you simply can’t come up short on, payroll is the top priority. Unhappy and disgruntled employees can be a nightmare, and rightfully so. But employees’ unhappiness is the least of your problems if you fail to make payroll.
Failing to pay your employees is illegal and can make a struggling company’s financial problems many times worse. If you’re using a payroll processing company, they’ll likely just drop you as a client if you lack the funds you need. If you’ve ever been in this situation, then you probably also have first-hand knowledge that most American employees live paycheck-to-paycheck. Failing to put food on your employees’ tables will likely cause them to question the overall stability of your business. All things considered, being able to pay employees is the top concern for employers.
The Moment You Know You Need It
If you’re a business owner or non-profit executive director, you know when you hit a financial wall. Almost every entrepreneur goes through that “oh, crap!” moment when they realize that they won’t be able to cover all their expenses. When this comes up, making payroll becomes a top priority before you have to deal with legal consequences or rumors among your employees.
No matter how secure you feel your business is right now, you’ll most likely face these challenges at some point. Many unfortunate circumstances could lead a business owner or non-profit executive director to seek financing options for immediate payroll loans. For example, one of the most common reasons you’d need to borrow to make payroll is a client who’s simply taking too long to pay you and your accounts receivable funding is short. Or perhaps you just needed to spend a large sum of money because of an unexpected event.
There are endless specific reasons why you’d be put in a situation that requires you to suddenly cough up the cash to keep your operations running.
The Ramifications Of Delaying Payment
For some people who’re new to entrepreneurship, simply delaying payment might strike them as a viable option. Delaying payroll is a go-to option for many employers. In practice, delaying payroll is one of the worst decisions a business owner or non-profit executive director can make.
The legal, financial, and social consequences of not making payroll are dire. First of all, failing to pay your employees on time is illegal. It can get you into trouble and cause you to have to pay fines that would make even the worst loan on the market seem like a good idea. According to the Fair Labor Standards Act, employers must pay their workers “promptly”. Withholding any payment can lead to fines.
If you follow the news, you’ve likely heard of the state of Americans’ finances. If you haven’t heard much, all you need to know is the situation isn’t great. Most Americans live paycheck-to-paycheck and according to the Federal Reserve, 40% of Americans can’t afford a $400 emergency expense. Not getting paid on time not only risks your employees’ well-being, but news travels fast and it can ruin your reputation as well. If you want happy, hard-working employees, the first step is paying them on time, every time. You don’t need worried employees questioning the company’s stability.
The best way to ensure that you don’t have to deal with these problems is with a line of credit. A line of credit is a financing option that gives the lender a lot of leeway.
A line of credit comes with a maximum draw limit that is typically very high. You can draw money from this “pool” of credit at your leisure and you can keep drawing until you reach your limit.
With a line of credit, you’ll have to make minimum monthly payments much like you would with a credit card. You can also pay off your entire balance at once. A line of credit can function as a great backup when sudden expenses arise. They can also be a great way to fund things like software updates and new work vehicles.
Unfortunately, not all lines of credit are created equal. Many lines of credit, especially those from banks, have bars of entry that are simply out of reach to all but the largest businesses. For the small businesses that form the backbone of the American economy, tough luck.
Fortunately, there’s one great option when it comes to lines of credit that can be used to make sure your payroll is always secure.
Financing Solutions offers lines of credit that can be put together in 48-72 hours. They have lots of experience in serving clients that require payroll funding. In fact, this is usually the first concern their clients bring up.
Signing up for a line of credit with Financing Solutions is fast and simple. You’ll need to fill out a two-minute online application, after which they’ll send you a quote. They’ll need the basic documents that are required for a business loan, such as:
- Bank statements
- Company tax returns
- Driver’s license
Financing solutions don’t have the stringent requirements that the banks will stop you with. Your organization only needs to have at least $400,000 in annual sales to qualify.
A Good Line Of Credit Is Your Best Friend When Things Go South
A line of credit serves as a great way for your company or non-profit to ensure that payroll won’t be missed. The world of entrepreneurship comes with many ups and downs, but those downs don’t need to cost you the respect of your employees or an overall disaster.
The lines of credit offered by Financing Solutions are inexpensive. They’re especially inexpensive compared to the problems that arise from failing to make payroll. The line of credit costs nothing to set up and you won’t have to pay for it until you draw funds. The line will renew yearly, and updates only require basic updated documents.
When it comes to payroll funding, peace of mind is priceless. Fortunately, peace of mind is free if you have a line of credit with Financing Solutions.