Monthly Payment

  • Cash advance funding
  • SBA Loan
  • Alternative payroll loans
  • Invoice factoring

Monthly Payment

You have started your business with high dreams. You have even recruited the best talents from LinkedIn and other channels to come and contribute their resources to your dream. However, you are still a start-up and there is no escaping that fact.

As the bearer of the vision and owner of the business, you can work around the clock without payment because your concern is the long-term viability of the business. However, it would be untoward to expect this from your employees. They need to be remunerated for their labor.

So how are you planning on paying their salaries? How will you make enough to pay them when you are barely one year in the business? It may not be possible and this could mean losing your best talent. However, you do not have to let it get to that. You can always take out a loan to make monthly payments and thus retain your best employees.

Even the well-established businesses take loans to pay their employees. For example, consider a seasonal business, which makes little sales during the low seasons. It may not make enough money to pay the employees. However, what it will make during the high season can pay the loan you took out to pay the employees.

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How often should you borrow money for payroll?

This should be a once in a long while thing, or maybe only for when you are starting out. However, if you have to borrow too often for the payroll, then that is an indication that there is something wrong in your business.

Or you could be candid with the employees and tell them that you are going through a hard patch and you will not be able to pay them a certain month. However, at some point later, you will still need to pay them. So while not meeting the payroll might give you a reprieve, it is just postponing the inevitable.

But there are many things to consider when borrowing money for anything in your business. Here are a few things that you should know when borrowing money:

How you will pay back the money

You have to factor in the interest rate

You can get payroll financing loan from non-traditional lenders

You will have to show the revenue records for your business

Your credit history is important

Don’t borrow if you do not know how you will pay

You can get payroll financing loans from traditional lenders

You will have to show some business history

This will show up in your records in future

Your business should be well stocked

Other sources of payroll financing

When making a decision to, or not to apply for a zero down payment loan, it’s very important that you dig dipper into its distinctive features. That way, you will understand what you should expect.

You could always try invoice factoring

That is right, you can always try invoice factoring to get money to meet payroll. This is when you “sell” the invoice to the lender so that they will get paid at the date that the invoice is set to mature. This means they carry the risk, so you get less money for it but still … it is a source of money.

Usually, what happens is that the invoice is financed for 80 percent in advance and then when it is paid, you will be paid the rest 20 percent. Invoice factoring is a good option for financing your payroll because the invoice is the collateral. However, traditional lenders will not be offering the invoice factoring option so it will have to come from other lenders.

  • Bank loan

    The bank payroll financing loan is good as it has low rates and a long payment period, however, qualifying for the loan is harder. The payment term can be anywhere from three to seven years. The interest rate can be 6% to 10% depending on the status of your business.

  • SBA Loan

    Specifically, you will be applying for the SBA Express loan, which can come really fast, in even less than 36 hours. With an interest rate of 6 percent and a payment term of between three and seven years, this loan looks more promising.

  • Cash advance funding

    This one is costly, but then it is fast. It can be advanced at a rate of anywhere between 16 and 100%. This is the best option for you if you have low or no credit. You can get this loan within a day, but as you have seen, it will cost you a lot in interest rate. The payment term usually starts at 2 months and can stretch to 4 years.

  • Alternative payroll loans

    This is the alternative to a traditional bank loan such that if you do not get that, you can always look for this one. Where bank loans can be funded in months, alternative loans take days. And the interest rates? Actually fair, all things considered, at between 9 and 16 percent. Terms of payment could be anything between 1 and 5 years.

Our small business financing experts are available to guide you through the funding Process.


At LCG, we fuse technology and the human touch to help lower search costs for borrowers and lenders while delivering better speed and customer service. LCG connects borrowers to a nationwide network of banks and lenders. Our team of dedicated funding specialists help borrowers get the right financing product and work quickly to help you secure the capital your business needs.
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