What is Payroll Financing?

What is Payroll Financing?

Being able to make payroll is one of the most stressful aspects of being a small to medium-sized business owner. But with payroll financing, those worries are laid to rest. You can pay your employees on time every time and keep your capital easily accessible for other pursuits.

Depending on the nature of your business, payroll financing can help safeguard your business from seasonal swings or slow-paying receivables. It can also help free up your cash reserves, providing you with the opportunity to grow your business. Let's take a closer look at how payroll financing works. 

What is Payroll Financing?

Payroll financing is an easy to use service wherein a payroll services company such as Matrix funds, administers, and executes your payroll for you. By accessing payroll financing or funding, your business can achieve the following: 

  • Ensure your employees are paid on time and what they're rightfully owed
  • Frees up capital and keeps your cash reserves intact
  • Safeguards your company from seasonal sale swings or accelerated growth

Businesses who can greatly benefit from payroll financing include those who have a large number of their accounts receivable overdue, those who are seasonal in nature and experience periods of slower sales or revenue, and those businesses which are growing so quickly that their cash reserves are beginning to run out.

How Does Payroll Financing Work?

Payroll financing is a very simple and straightforward process. Your business signs an agreement with a payroll funding or payroll services company such as Matrix. Matrix will then fund, administer, and execute your payroll for your company so there's nothing to worry about or manage. Your business will then have 30-60 days to reimburse us (OAC — exceptions apply). That's all it entails. 

In using a payroll financing company to help your business consistently meet payroll, you can expect the following three advantages: 

Always Make Payroll

Making payroll can be one of the most nerve-racking parts of being a business owner. You like your employees and want to keep them happy, and depending on where you operate out of, you're also legally obligated to pay them what they're owed.

Instead of having to temporarily lay off your employees during slow periods or times of reduced sales, which could result in them finding another job elsewhere and not being available to return when your cash flow improves, you can keep them and retain your high-skilled employees.

Free Up Capital

If your cash reserves are constantly getting depleted in order for your company to make payroll, that leaves very little wiggle room or opportunity to reinvest in your business. If you have your sights set on expanding your operations, payroll financing can allow your company to have the capital to do so. Or if you have high-interest debts that are weighing you down, you can put your excess money towards paying them off quickly so you can get back into the black. 

With improved access to capital, your business can use that money as you see fit. You'll no longer be tied down and forced to direct a large portion of your cash reserves to make payroll. 

Safeguard from Seasonal Swings or Accelerated Growth

For those businesses who experience periods of slow sales due to their seasonal nature, payroll financing provides the perfect safety net for them to keep their employees during the slow times. No longer will they have to lay them off and hire new ones once things pick back up again. 

For those newer businesses that are expanding faster than anticipated, payroll financing allows them to retain their talented staff even if their cash reserves are beginning to deplete. This can give them the buffer they need to secure further venture capital so their expansion can continue unabated. 

Focus On What Matters Most

With payroll financing, you can offload all the worries and burdens of making payroll on a consistent basis. This includes the administration and execution of payroll processing, allowing you to focus on what really matters most to your business. 

You'll be freed up to focus on increasing revenues, expanding your business, and securing market share. And you'll be able to rest easy knowing your valued employees will be paid what they're owed on time, every time.

Reach out to learn more about our payroll financing at Matrix Labour Leasing, contact us today and one of our team members will be happy to answer any of your questions!

Frequently Asked Questions

What are the fees associated with payroll financing?

This depends on the amount of funds you require for your payroll and how good your credit is. That being said, our fees are extremely competitive. Please contact us for more information.

How quickly can I receive cash with payroll financing?

In most cases, Matrix Labour Leasing can get you the cash you need for your payroll obligations within one or two business days of completing the agreement. With our payroll administration and processing expertise, we also take care of everything associated with ensuring your employees are paid what they're owed, with the proper deductions being calculated and applied.

What does OAC mean? 

OAC stands for "on approved credit" and it means the terms of your agreement are dependent on either your business or yourself having a good enough credit score to secure the rate in question. Exceptions can be made, please contact us for more information. 

Ready to make your life easier?

If you're ready to focus on growing your business and would like Matrix to take care of your admin headaches, contact us today by calling 1-866-666-9520 or fill out the form below. Let's start making your life easier. 

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