If your business needs to find a way to cover payroll and for whatever reason, the capital is not there, it’s time to look at different options that will help take care of expenses. Here are seven ways that you can consider for your business.
While tapping into a personal bank account is easily the most common way that business owners cover payroll, this option is often not available for one or another reasons. Other potential assets include stock sales and savings accounts.
Friends and Family.
Often friends and family are one of the easiest ways for business owners to get a loan, and the terms are usually less strict than a formal loan. The downside? You’re asking friends and family.
A Line of Credit.
For those with a strong banking relationship, a well-documented business history, and possibly a good previous loan history with an institution, a line of credit is a possibility to cover payroll.
One possibility for those without a strong loan history (or just personal bad credit) is Accounts Receivable Factoring. This is useful for businesses that are profitable, but have a long (30-60 days) delivery or sales cycle.
SBA microloans can be considered if you are looking a good amount of time in advance, but they can take time through the application process. If you need more than $50,000, consider another option.
One of the most unique ways to increase capital over the past few years as been Peer-to-Peer lending, where individuals offer loans which come with their own unique rules. This can be an option to cover payroll.
Merchant Cash Advances.
For those who have assets and want to cover payroll, this is very common, as it gets a loan with little downtime.
If your business needs to cover payroll, the options above should give time for some pause. If you need the help of an alternative lender willing to determine what’s best for your business, reach out today. It’s definitely good to know what the options are in case need arises.