“Making payroll.” This phrase is tossed around by small and mid-sized businesses as if it is as simple as turning on the lights. Yet failure to make payroll can spell the certain collapse for many companies.
Making payroll is undeniably the #1 obligation of any business. Additionally, there is no room to negotiate the terms or timing for “making payroll.” Any business owner must have the cash on time, every time.
The Payroll Friday Systematic Approach
At Payroll Friday, we recognize the outsized importance of meeting your payroll. It is a stress test that most businesses face every week, and those that don’t pass the test are out of business. Enduring this weekly, or bi-weekly, challenge hamstrings the growth of entirely too many small businesses. Why face this tyranny every week? Why not get help, find an ally, and get protection?
Beat back the stress caused by payroll demands permanently.
Failing to make payroll is tantamount to the collapse of your company, so why not develop a robust protocol to permanently satisfy it. That is how we see the challenge.
Payroll Friday is a funding platform that creates a continuous revolving source of funds to pay 100% of your employees’ payroll via your B2B business’ outstanding invoices. Now you don’t need to think about making payroll. As you invoice your customers, we provide credit into your payroll account. When customers make their outstanding payments, we retain a small fee, often less than 1%, and forward the balance of payments to you.
By using the Payroll Friday platform, you are embracing a system that removes the angst of payroll demand from your day-to-day considerations. Every Tuesday, Payroll Friday provides you and your payroll service provider with your credit balance available for payroll. The balance is determined by a combination of outstanding invoices and payments received from your customers. The objective is to always have sufficient funds for payroll. Your service provider will copy us with the payroll request, and we will fund the account promptly. Payroll Friday also manages your accounts receivable and prioritizes its distribution.
You now have a system for managing your accounts receivable and for funding payroll.
Other Choices for Meeting Your Ongoing Payroll Needs
Spot Financing: Small and mid-sized companies can secure Merchant Cash Advance (MCA) loans to supplement payroll. MCA loans typically fund quickly, as they are built for emergencies. Most MCAs create a weekly repayment schedule that is not flexible. Early repayment usually triggers penalties. If your company very rarely has issues meeting payroll, an MCA advance can be an acceptable alternative. Do not, however, secure more than one loan at a time, and expect to pay a very high APR for the funds.
Bank Line of Credit: Some companies can secure a revolving line of credit with their bank. Likely, it will be an asset-based loan (ABL). It is a good option for those that qualify, however, very few do.
Service Provider Loans: A few payroll service providers have a lending facility for a portion of your payroll. Most, however, prefer you use them as your service provider, and repay the loan prior to the next payroll. Also, the fees for this approach can be high.