What Type of Business Do You Have?
Best Payroll Loans: Get a Payroll Deduction Loan For Bad Credit
Can a payroll loan help your business? Yes, in most cases a payroll loan can help your business. Most lenders consider payroll a general working capital expenditure. This means your payroll loan can be used for a variety of business expenses. There are many options available for payroll loans increasing the importance for you to do your research and select the best option. Primerates.com is a time-saving resource that allows you to apply online and receive multiple competitive offers within minutes. Keep reading to easily compare some of the top choices for payroll loans.
What is a payroll loan?
A borrower can be issued a cash advance in the form of a payroll loan based on their status and income. If you have identification and proof of income payroll loans can be easy to secure.
Why would you need a payroll loan?
If you are short on cash a payroll loan can help balance your cash flows. A payroll loan is commonly used for immediate financial needs. This can include…
- Travel
- Repair
- Purchase of inventory
- Funds to pay employees
What is the difference between payroll loans and payroll factoring?
The primary difference between payroll loans and payroll factoring is that payroll factoring is not a loan. Companies operating with little credit or poor credit should look into payroll factoring. Funding decisions consider the credit rating of a business's customers rather than a credit score.
Best Options for Payroll Loans
For Quick Funding
OnDeck - Payroll Deduction Loan For Bad Credit
Originally founded in 2017, OnDeck is one of the largest online small business lenders that can provide quick funding.
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| Loan Amounts | $5,000 to $500,000 |
| APR Range | As low as 9.99% |
| Repayment Terms | Term loans up to 3 years |
| Time to Funding | As fast as 1 day |
| Click “Check Rates” to apply to OnDeck | |
» MORE: OnDeck Business Loans Review
Pros
- Transparent terms
- Access to loans through business debit cards feature coming soon
- Funds available quickly
Cons
- Higher APRs
- Origination fee
- No factoring offered (all funding options incur debt)
FundBox
FundBox is an invoice factoring company that services individuals and B2C entities. This fintech company can deliver fast funds up to $100,000.
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| Loan Amounts | $1,000 to $100,000 |
| APR Range | 10.1% to 79.8% |
| Repayment Terms | 3 to 6 months |
| Credit Score | No minimum personal credit score required |
| Time to Funding | A few minutes to several days |
| Click “Check Rates” to apply to FundBox | |
Pros
- Finances invoices for individuals and small businesses
- No minimum credit scores
- Transparent terms
Cons
- Minimum requirement 6 months in business and 6 months billed in your accounting software
- No collection services
- Transactions are full recourse
For Unpaid Invoices
BlueVine
BlueVine can provide capital for small to medium-sized B2B and B2G businesses. This fintech company is known for invoice factoring and servicing funding requests faster than most of its competitors.
 Line Of Credit |
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| Loan Amounts | $5,000 to $250,000 |
| APR Range | 15% to 78% |
| Repayment Terms | 6 or 12 months |
| Time to Funding | As fast as 24 hours |
| Click “Check Rates” to apply to Blue Vine | |
Invoice Factoring |
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| Loan Amounts | $20,000 to $5 million |
| APR Range | 15% to 68% |
| Repayment Terms | Up to 13 weeks |
| Time to Funding | N/A |
| Click “Check Rates” to apply to Blue Vine | |
Pros
- Fast and easy application process
- Funding decisions are typically made within 24 hours
- 80% of production is from repeat customers
- No hard credit checks
Cons
- No funding for B2C companies
- Prefers personal FICO scores above 600
- Factoring transactions are full recourse
Alternative Invoice Financing Options
Business Lines of Credit
A business line of credit can be used whenever you need as long as you stay under your approved limit. Although it can improve cash flow for your business the pros and cons should be considered.
Pros
- Balance cash flow
- Only pay for what you use
- Take advantage of more opportunities
- Builds business credit
Cons
- Extra charges and fees
- Qualifying can be difficult
- Temptation to misuse line of credit
- Low borrowing limits
Invoice Factoring
Invoice factoring can provide immediate cash flow with no collateral required. However, invoice factoring is very different than a business loan. Outstanding invoices are sold to a factoring company that pays you in a lump sum.
Pros
- Immediate & ongoing cash flow
- Higher approval rate
- Outsource the task
- No collateral required
- Builds better customer relationships
Cons
- High fees
- Liabilities (you may be responsible for unpaid invoices)
- Eligibility can be dependent upon customer payment track record
- Lack of control
What do you do if you can’t cover payroll?
Owning a small business can be an extremely rewarding opportunity that can allow you to share your passions and help others. However, it can have its share of ups and downs. Defaulting on payroll can result in lawsuits and other hassles so it’s important to take proactive measures to cover payroll.
Let’s compare some options in the event you can’t cover payroll...
Payment planning
If you have outstanding debts or cannot cover payroll you should consider payment planning. Financing options are available that can provide a plan for you to pay back outstanding debts.
Separate business savings account
Setting up a separate business savings account can come in handy for emergencies such as not being able to cover payroll. You should allocate an appropriate amount of funds each month to this savings account to better prepare for emergencies.
Open communication
It can be embarrassing to not be able to cover payroll, we get it. However, openly communicating with employees can result in many positives. It can provide the opportunity to collaborate as a team, reinforce core company values, and so much more. It can also help avoid brutally blindsiding employees when you tell them you are running out of money.
How PrimeRates Works
PrimeRates provides access to personalized business loan offers through our simple and quick pre-qualification application. Once you're pre-qualified, you can select the best offer for you and finalize the business loan application with the lender.
Apply in minutes
Our simple application takes less than 5-7 minutes to complete.
Select your business loan offer
Choose the offer that best fits your needs by comparing loan amounts and terms.
Receive funds quickly
Finalize your loan offer with the lender you selected to receive your funds.
