If You’re Facing Cash Flow Problems, What Business Payroll Funding Options Do You Have?


As a small business owner, there may come a time when you find yourself looking for funding to either pay your employee payroll, expand your office space, acquire a competitor or purchase new equipment. And when your customers take longer than expected to pay you, your business can quickly begin to worry about financial problems.

Regardless of why you need money, it’s good to know that you have several options to get you out of a bind; here’s a list of the most common ones so you can make an informed decision.

Invoice factoring

With invoice financing, a lender advances you cash, usually in the amount of 85% of the value of your outstanding invoices. The lender holds the remaining 15% until your customer pays you back and, in the meantime, will charge fees on that percentage. Suppose you are a startup with a shorter credit history or lower credit score. In that case, you will be much more likely to qualify for this type of business payroll funding, as invoice finance companies are usually more concerned about the value of their invoices and their customers. ‘payment history than your company’s finances and credit score.

Alternative Lenders

Alternative lenders are non-bank entities that provide small business payroll funding. While traditional banks have strict requirements and low approval rates, alternative lenders are on the opposite side of the spectrum.

SBA Loans

The U.S. Small Business Administration offers several loan programs, each of which is designed for a specific purpose.


Crowdfunding allows small business owners to raise capital through the collective effort of a large group of people rather than a single entity. With a variety of crowdfunding platforms to consider, a growing number of entrepreneurs have turned their attention to this method of funding. While anyone can start a campaign in search of funding, there is no guarantee of success.

Retirement Account / ROBS

Depending on your age and financial focus, you may have enough money in a retirement account to fund your business startup. In this case, you’ll want to consider a Rollover for Business Startups, also known as ROBS.

With this, you can invest your retirement funds without paying an early withdrawal penalty or income taxes.

Angel Investors

A favorite funding method of many entrepreneurs, an angel investor, is a person who provides money to a company in exchange for equity (or convertible debt). While these individuals exist, they can be challenging to find. In addition, angel investors review many proposals but only invest in a few select opportunities. If you want to get angel funding, it is imperative to create a solid business plan, hone your pitch, know what you want in terms of funding, and know what you are willing to give up in return.

Many experienced business owners agree on the importance of having a tight budget. It’s usually wise to err on the side of caution when budgeting and factor unexpected expenses into your cash flow projections.

Now that you know the business payroll funding options, you have to get ahead and keep your business operating as usual, or better yet, grow, look at each one closely and choose the one that best suits your circumstances.