Payroll Finance Information

Even when a business is profitable and self-sufficient, occasional cash flow difficulties can cause untold problems. If your business doesn’t have a significant cash reserve you are very much dependant on clients settling invoices within the timeframe specified in their credit terms. And if there is a delay in the settlement of just a few large invoices, it can be difficult to cover operating costs. In this type of situation there are a number of options open to you, but the most popular solutions are debtor finance and payroll finance. Whereas all debtor finance variations are based around the value of a business’s outstanding accounts receivables, payroll finance is a flexible form of unsecured borrowing that is based upon your wages.

With any payroll finance arrangement, the amount of the loan is determined by the total cost of your company’s monthly wage bill, but once secured the loan can be used for any business purpose. After a minimum period – usually three months – payroll finance can be ‘switched’ on and off as and when you need it, giving your business the flexibility it needs to keep trading during a tight spot. Here at First National Money, our expert advisers have developed close relationships with a number of specialist lenders, which means we can help secure a payroll finance arrangement that is just right for your needs.

Typically a company must have been trading for two years to qualify for payroll finance, with at least the first year’s accounts filed with Companies House. The business should also be profitable, with an annual turnover of over £100,000 and at least five employees on the books. If your business meets these criteria, we should be able to secure you a deal that provides protection against all cash flow difficulties, and unforeseen one-off payments that cannot be covered by your cash reserve. Unlike other forms of finance, payroll finance does not require any directors’ guarantees, is completely confidential, and can be repaid at any time without any prohibitive fees.

With payroll finance, you can ensure that your business has a financial cushion in place to carry you through tough times, without any risk to the company’s reputation. If this sounds like the type of finance that could help you out of a spot, call First National Money today for a free ‘no strings’ quotation.