Business loans have always been a traditional and popular choice when it comes to a lending service. However Payroll Financing is a great new alternative for businesses that have to deal with cash flow issues due to many reasons. The last few years have been difficult for most businesses and as the result maintaining and improving the cash flow of the organization has been a major priority.
What is Payroll Financing?
Payroll funding or sometimes known as Payroll Financing is a type of lending service through which businesses can get capital in order to process their payrolls. Businesses can at times struggle with cash flow and meeting payrolls on time. According to a survey about 40% of businesses struggle with cash flow. Needing additional financing is not a sign of poor business management. Cash flow can be tight due to pending invoices, usually invoices have a 1 month to 60 day cycle. This can create a gap period when funds will be tight and processing payrolls will feel like a battle. It can be a sticky position to be in where you have to tell your employees they will not be getting their paycheck or receiving their paychecks late.
1 Click Capital’s primary goal is to keep your business afloat by making sure your employees are getting paid. You may be running payroll on a weekly or monthly basis, 1 Click payroll can help you finance those payrolls.
So how is Payroll Financing different from business loans?
- Lesser payments in the long term
One advantage of invoice financing is that you only pay for the amount you have sued. Instead of a one-time fee per payroll, obtaining a business loan typically requires monthly interest payments or fixed-term repayments.
- Quick access to a line of credit
In contrast to business loans, the payroll financing method is quicker for getting funds. Traditional loans, which take longer to complete and are therefore less suitable when you need an instant influx of cash, payroll financing allows you to receive funds when your payroll has been accepted.
As opposed to traditional loans, payroll funding often lets you apply online with fewer conditions, which makes the procedure much more convenient and quick.
- Lesser documentation needed
Unlike business loans, applying for payroll financing doesn’t include as much paperwork or cash advance covenants. While some paperwork is still required, it is typically simple and can be finished in one sitting, making it a practical choice in times of financial emergency.
- Lesser commitment and risk
Business loans typically need you to put down some form of collateral and this can include both corporate and individual assets. However, Payroll financing is more secure for you because it is only backed by your payroll receipts, preventing the loss of valuable assets in the event of default. You have the freedom to enroll for 1 Click Payroll Financing whenever necessary because there are no long-term commitments involved.
So in short, Payroll Financing is a faster, less risky and hassle free alternative to solving your cash flow problems when your business is unable to process salaries for the staff. With a few simple fast and flexible processes you can enroll for 1 Click Capital’s 1 Click Payroll services.