Running a business isn’t always easy. There are times when keeping your company in the black is a real challenge. However, no matter what the obstacle a business owner faces, there are some things that should never be overlooked – like payroll.
Paying your employees is must, no matter the situation. Unpaid employees aren’t happy employees, and it’s well within their rights to file a state wage claim against you if they aren’t paid. Plus, when employees don’t receive what they’ve earned, it shouldn’t come as a surprise when they begin seeking work elsewhere.
Payroll loans offer business owners a way to pay their employees what they deserve when there isn’t enough cash on hand to do so. Here are three situations were a payroll loan could be incredibly helpful:
Cash flow woes
One of the most common reasons businesses take out a payroll loan is to help them make ends meet when cash isn’t coming in as expected. Perhaps a large order still needs to get paid off or maybe it’s the off-season and clientele is in short supply. Whatever the reason, payday is coming up fast and it’s time to find a solution.
Every business has its busy season. As it approaches, business owners must prepare for the sudden rush of customers. This might mean stocking up inventory, creating new product offerings and, of course, hiring temporary employees to handle the demand.
Bringing on new workers will be immensely helpful to businesses that see extreme peaks in sales during this time, and the uptick in business will enable the employer to compensate these new hires for their hard work.
Savvy business owners know the importance of hiring early to ensure the new employees are properly trained and understand the ins and outs of their positions. However, with the income that will cover the salaries of these new employees not coming in until later in the season, it can be tricky to make payroll for the added help at first. A payroll loan can help you pay these employees before the uptick in business.
Businesses evolve and change over the years. There may come a time when you reevaluate your business structure or a specific element of it and determine it’s not serving your company as well as you had thought. Perhaps you’ll decide to open a new department, or consolidate two; you may find you need to hire a new employee, or that you need to let someone go.
Whatever the change is, it’s likely challenging and could involve moving personnel. The decision to consolidate departments or cut some people off your payroll might be a result of financial strains, and the business restructuring is a part of a plan to cut costs. In this case, a payroll loan may be helpful in making ends meet during the transition.
If the business restructure involves opening a new department or welcoming new hires to the team, your company may be expanding with hopes of bringing in more revenue. However, until that vision becomes reality, you’ll need to pay your new employees; a payroll loan will assist in that.