Payroll Loans
Your payroll costs are non-negotiable, you must pay them on time. So for months where cash is tight, a payroll loan can help cover essential expenses.
- Compare a wide range of lenders and rates
- Check your eligibility in minutes
- Find out how much you could borrow
It's fast, free and won't affect your credit score
Running a business is expensive; and one of the most significant outgoings is payroll — and that’s on top of other expenses, including purchasing stock and investing in marketing campaigns. Your employees are essential to running your business, but they’re expensive. You’ve got the initial recruitment costs, their monthly salaries, and when you factor in expenses such as national insurance payments, the price per office desk, training, pension contributions, and more, you can expect to pay up to 100% more than the employee's salary.
Costs quickly add up, and you can’t decide when to pay your staff, which means you need a stable cash flow to keep operations running smoothly and staff happy. Keep reading to learn more about business payroll loans and how you can get one.
What is a payroll loan?
A payroll loan is a business loan that helps you cover costs associated with your payroll. These loans can be unsecured or secured, and you usually receive the funds in a lump sum, repaying them over a pre-agreed timeframe, with interest. Most businesses can apply for these loans if they’re UK-registered, over the age of 18 and have been trading for at least four months.
Benefits of a payroll loan
A payroll loan gives you peace of mind, so when payroll comes around, you’re not worrying about how you’re going to make ends meet. Instead, you have confidence that you can pay your employees without having to wait for customers to pay their invoices or by converting more sales. There’s no need to worry about external factors negatively affecting your cash flow or ability to manage employees, because you have that loan on hand.
Payroll loans for small businesses
There are many suitable loan types to cover payroll expenses:
Invoice financing
Once you're set up for invoice financing, you can choose to sell one or more invoices to the factoring company, as and when you need to access quick cash to pay staff promptly, always. Receive up to 95% of the value of your unpaid invoices, instead of waiting out the payment terms.
Business line of credit
A business line of credit is a flexible financing option for small businesses. You agree on a limit with the lender, then you’re free to draw down funds as needed. The lender will only charge you interest on the money you use. You can get non-revolving or revolving credit, giving you even more flexibility when accessing cash to pay for any aspect of payroll. Use your line of credit to pay wages, benefits and taxes.
Short-term business loan
Covering payroll expenses is a short-term challenge, so a short-term business loan could be a good option for you. Ensure healthy cash flow and repay your loan usually within 12 months. Short-term loans are quick to apply for, with funds in your account as quickly as a matter of hours (particularly if unsecured).
Working capital loans
Working capital loans are designed to help you plug short-term cash flow issues and cover operational costs, including payroll and are usually repaid within a year. A working capital loan can be particularly useful for businesses experiencing seasonal sales fluctuations, ensuring a stable cash flow throughout the year.
Merchant cash advance
A merchant cash advance is an advance against your future card sales. If you accept credit or debit card payments, you could explore this option. Unlike traditional loans, you repay a merchant cash advance as a percentage of your monthly card sales. So if you’re looking for a loan with predictable monthly repayments, a merchant cash advance might not be for you.
Where can I find payroll loan companies?
We work alongside various alternative finance providers, offering flexible and affordable payroll loans to UK business owners like you. We have plenty of lenders to choose from, so if you don’t think a particular loan suits your needs, we’re confident you can find one elsewhere on our platform that does.
How to apply for a payroll loan online
Starting your payroll business loan application is easy with our free business loan comparison tool. Our tool is self-serve and features many UK lenders, allowing you to quickly compare loan rates and total repayable amounts to help you find the right loan fit for your business.
- Tell us a bit about what you’re looking for (loan amount, ideal repayment term, reason for the loan, etc.)
- Compare lenders and loan offers in one place, and expand each loan to learn more
- Find a loan you like and click on the lender to continue with the next steps of your application
It’s that simple. Start your payroll loan journey today: compare payroll loans.
About the author
Adrian T
5/5
Amazingly fast, efficient service, minimal paperwork. So much faster than my business bank of twelve years.
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