Applying for Payroll Funding
Applications are judged on a case-by-case scenario to determine the loan size and type they qualify for. Overall, we keep our application process simple and the paperwork light, so you can get fast funding. We’ve outlined the main criteria our lenders look at below:
Operating Revenue:
Churning a profit is a clear indication of a viable business model. Lenders like to see your company is generating at least $10,000 a month in sales. The more money your business brings in, the better.
Age of Business:
Businesses that have been operating for a long time are usually considered less likely to fail. They’re a safer bet, from a lending perspective. Approval odds increase for companies who have been in business for over 6 months and go up again at the 2 year mark.
Liabilities:
Keeping your liabilities low can help improve your debt to income ratio (DTI). Lenders will typically use your DTI ratio when determining how much you can afford to borrow. Having low amounts of debt, relative to income, can improve your odds of being approved for a large payroll loan.
Verification Documents:
We keep paperwork light to keep things moving. All our lenders need from you is your last 3 bank statements. Your bank statements will be used to validate the financial information you’ve provided.
Credit Standing:
Credit scores tell stories about our borrowing habits. Having a high credit score shows you’ve responsibly managed funds in the past.
Applicants with good credit are seen as lower risk and therefore have access to some of the most competitive loan products in the marketplace. That being said, all types of credit scores can be approved for financing. It’s also worth noting that your business credit score will matter more than your personal one, since you’re taking out a business loan.
Popular Uses for Staffing and Payroll Financing
Payroll loans are used for exactly what they sound like - payroll! That being said, payroll funding ultimately frees up working capital, allowing extra cash to be allocated towards a variety of priorities. Below are some of the most common ways payroll financing is used:
Growing Your Team:
As your business expands, you might need more help. It’s not uncommon for businesses to initially begin growing faster than their pocket book may be able to keep up with. Funding can be used to invest in the people who will help you scale growth and build your empire.
Avoiding Layoffs and Furloughs:
We understand how important your team is to the success of your business. Letting your employees go can have devastating consequences. Staffing loans can help you keep top talent and avoid turnover, and ensure you have the labor you need to get the job done.
Unexpected Expenses:
Sometimes, we do everything right and things still go wrong. If the money you allocated towards hiring ended up going elsewhere, we got you covered. We understand that emergencies happen from time to time. A business loan for payroll can be used to replace lost funds.
Pandemic Relief:
Many business owners have experienced a dip in revenue since the pandemic and require additional funds to cover cash flow gaps. Other companies have seen expenses rise after purchasing special supplies and sanitation materials needed to keep employees and the workplace safe. Payroll loans can reduce the financial burden of staffing costs, freeing up additional working capital to be used for other business expenses.
Taxes and Benefits:
Employees are an expensive, though worthwhile investment. Small businesses are required to pay 7.25% of every employee’s gross payroll. In addition to payroll tax, there’s also workers comp and unemployment to pay for. A business loan can be used to help cover these expenses.
What Are Business Loans for Payroll?
Payroll loans are used to describe different types of short-term financing. Under the umbrella of business loans for payroll, you’ll find a number of loan options, which vary in structure and loan terms. The most popular funding types are payroll cash advances and term loans.
Payroll financing is best used for covering short-term cash flow gaps, rather than as a long-term working capital solution. Business owners who use payroll loans are typically seeking to solve an immediate need for capital.
At Clarify, we offer online payroll loans. The main benefit to this lending model is speed. Unlike traditional banks, online lenders have considerably less paperwork demands, which helps speed things up.
If you’re in a bind, we understand waiting may not be an option. We work quickly to meet your most pressing needs, distributing funding in as little as 24-48 hours.
How Does Payroll Financing for Employers Work?
Small business owners typically use payroll financing as a bridge loan. In this way, they’re intended to cover a short-term working capital need. In most situations, the funds are specifically used to cover payroll costs.
Employers have a legal obligation to pay employees for their work. If a business owner delays payment for too long, there can be serious consequences. So, during times when cash on hand is limited, business owners need to come up with a quick solution to ensure their employees get paid. Payroll loans provide a work capital solution, where owners can borrow funds to be distributed to their staff immediately.
What Are the Benefits of Online Payroll Loans?
Securing financing through an online lender provides unique advantages. Below are some of the top reasons business owners choose to work with us over traditional lenders.
Competitive Rates:
We use our network of 75+ lenders to get you access to the most competitive interest rates and loan terms. Low interest rate financing starts at just 7%.
Fast Funding:
Unlike large banking institutions and traditional lenders which tend to be slow moving, online lenders work fast. At Clarify, you can receive funding in as little as 24-48 hours. You get the working capital you need without the wait.
No Hidden Fees:
When you choose Clarify, you can expect total transparency. Unlike other lenders, we don’t hide prepayment penalties within the fine print. Our contracts are written with simple terms that are easy to understand. What you see is what you get.
Low doc:
We get that you’re busy. Our application process is streamlined for maximum efficiency. We keep documentation light and only ask to see recent bank statements.
High Approval rates:
At Clarify, we understand that you’re more than your credit score. As an alternative business lender, we don’t have the same restrictions of large financial institutions. We look at applications holistically. We frequently approve borrowers who have had their application denied at credit unions and big banks.
Flexible Financing:
Choose from multiple loan products to find the right match for your needs. We understand that different business owners have their own preferences. We’ll tailor your loan offers based on the information you provide to your lending advisor. That way, you get financing that’s customized to your unique situation.
