Payroll Financing, Loans & Funding
Payroll loans improve cash flow so you can pay your employees on time.
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What is Payroll Financing?
A payroll loan is a type of small business financing that improves cash flow during times when finances might be tight. It is a short-term loan designed to ensure businesses can always pay their employees on time before the revenue comes in. They are typically used when waiting on invoices to get paid from customers, waiting for insurance payments, or when you know the money is coming, but it hasn't arrived just yet.
How Payroll Loans & Financing Work
Payroll funding comes in multiple forms. Some businesses leverage traditional loans to cover payroll costs. These are longer-term loans spread over several months. A line of credit is another way for businesses to access fast cash. Then there are merchant cash advances which get repaid over time with a business's credit card sales. Each type of loan has different terms and interest rates. Businesses take out the loan to cover payroll costs and as revenue comes in, they pay back the loan.
Use Cases
How To Use a Payroll Loan
Payroll loans are a good indicator that a business is experiencing a cash flow problem. They can cover costs associated with wages, bonuses, commissions, and even payroll taxes that get paid to the IRS. There are many ways to use small business payroll loans.
Learn Why Us-
Retain Employees
Paying your staff on time every time helps you retain employees, and using payroll financing ensures you always have the means to give them a reliable income.
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Hire Extra Workers
Growing your business sometimes means you need to hire more staff before you have the income. Payroll loans help you hire more people.
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Manage Short-Term Cash Shortages
Payroll loans can bridge the gap during temporary cash shortages and create better cash flow when needed.
Why Apply for Payroll Funding?
Access Additional Cash
Business payroll loans give you access to another cash flow. This is especially helpful during seasons when you need it the most.
Keep Business Operations Running
No business owner likes to run out of cash. A payroll loan can help free finances in other areas of the business so that everything runs smoothly.
Keep Employees Happy
Don't be the employer who is always paying late. Payroll loans keep employees happy so they will never know when there is a cash flow problem.
Minimum Eligibility Requirements for Payroll Loans & Financing
Many businesses can qualify for a payroll loan if they meet the minimum requirements. Here’s what you need to get payroll funding.
| Time in Business | Minimum 6 Months |
|---|---|
| Business Annual Growth Revenue | $240K+ Annual Revenue |
| Business Checking Account | Yes |
| US Citizen/Based Company | Yes |
| FICO Score | 570+ |
| Other Financing | None |
| Bankruptcies | None open |
Better Your Business With Fora Financial’s Payroll Loans & Funding
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Grow Your Business
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Get Quick Access to Cash
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Retain Valuable Employees
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Hire Additional Skilled Workers
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Manage Cash Shortages
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Avoid Having to Cut Costs
Case Studies
Powering Growth in Electricity
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Funding Amount: $775,000
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Industry: Commercial & Residential Electric
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Use of Funds: Personnel and Equipment Upgrades
Featured Funding
Bridge Funding
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Funding Amount: $2,000,000
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Industry: Construction
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Use of Funds: Bridge funding
Technology and Data Services
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Funding Amount: $700,000
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Approval Amount: $1.1 Million
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Industry: Technology / Data Services
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Use of Funds: Cash Flow Liquidity
Communications Expansion
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Funding Amount: $1 Million
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Approval Amount: $1.2 Million
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Industry: Telecommunications
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Use of Funds: Expansion
Featured Funding
Stabilizing Growth
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Initial Funding Amount: $750,000
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Add-on Opportunity: $450,000
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Industry: Manufacturing
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Use of Funds: Financial Stability, Growth
Automation Growth
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Funding Amount: $300,000
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Approval Amount: $450,000
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Industry: Manufacturing / Automation
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Use of Funds: Working capital
Featured Funding
National Food and Beverage Franchise Network
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Funding Amount: $1.4 million
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Industry: Food and Beverage Franchise
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Use of Funds: Expansion and Renovation
Organic Growth
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Funding Amount: $750,000
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Approval Amount: $1,400,000
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Industry: Organic Food Grower
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Use of Funds: Cash Liquidity
FAQs About Payroll Loans, Financing & Funding
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Lines of credit and merchant cash advances are the two most commonly used types of payroll loans. Traditional loans and factoring are two other options when businesses need better cash flow for their payroll expenses.
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Yes, they are a great idea if you're at risk of being late paying your employees. While they are typically used as a last resort, paying your staff on time is critical if you want to stay in business and hire great talent to work for you.
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If you meet the minimum eligibility requirements for a payroll loan, you bring proof of your business longevity, income, and other requirements to a lender, and fill out their application. The process often takes less time than traditional lending.
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The rates for payroll financing varies, but can be anywhere between 15 and 30 percent. These loans have higher interest rates because they can be more risky for the lender. You may qualify for discounts on the interest rate if you've taken out and successfully paid back a payroll loan.
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Many lenders offer fast approvals for payroll financing. Depending on your business qualifications and your lender’s process, funds are typically deposited within 24 to 72 hours.
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Yes, payroll funding can also cover payroll taxes, bonuses, commissions, and other payroll-related expenses to keep your business operations running smoothly.
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Most payroll loans are unsecured, meaning they don’t require collateral. However, some lenders may offer secured options for lower interest rates.
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Missing payments can lead to late fees, increased interest rates, and potential damage to your business credit score. Some lenders may also take legal action if the loan remains unpaid.
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Yes, seasonal businesses often use payroll loans to cover employee wages during slow periods before peak season revenue starts coming in.
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Payroll financing typically offers higher borrowing limits than business credit cards, making them a better option for covering payroll expenses. However, interest rates and repayment terms should be compared before deciding.
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Some lenders require a personal guarantee on business payroll loans. A personal guarantee means you’ll be personally responsible if your business fails to repay the loan. If you’re not sure, check with your lender for specific terms.
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Some payroll loans allow businesses to cover payments for independent contractors, but it depends on the lender’s policies. Be sure to confirm before applying.
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Yes, making timely payments on your payroll loan for small business purposes can help build your business credit. Alternatively, late or missed payments can negatively affect it.
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Many lenders allow early repayment, but some may charge prepayment penalties. Always review your payroll financing terms before finalizing the agreement.
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