Running a small business isn’t easy. After all, it’s a huge responsibility with a million moving parts and endless decisions to juggle each day.
One of the most important aspects of being a small business owner or manager is paying your employees every pay period. Your employers count on you, and there’s no excuse for not cutting their checks on time.
Unfortunately, there are occasions when revenue doesn’t meet expectations. This can leave you short on cash needed to meet your payroll requirements. This article takes a look at what to do when you can’t make payroll. Keep reading to get the inside scoop on how to ensure that your staff gets paid on time.
Consider Liquidating Your Surplus Inventory
Do you have extra inventory just sitting in the warehouse taking up space? If so, you might want to consider liquidating as much of it as possible in order to use it for payroll financing.
After all, surplus inventory isn’t serving any purchase and is far less important than meeting your payroll obligations to your employees.
Apply for a Business Line of Credit
Another option is to apply for a business line of credit. This is a great short-term solution when you experience cash flow problems.
Getting a business line of credit is a relatively simple process. You receive a line of credit from a lending institution, use the available credit whenever needed, repay it, and then use it again as future needs arise.
Just keep in mind that a potential lender will typically take a look at the current health of your business and credit history before approving a line of credit.
Apply for a Small Business Loan
You could also apply for a small business loan if you’d rather avoid a business line of credit. This is a loan that can be used to keep payroll afloat for a period of weeks or months until your cash flow problems level out.
Take a closer look at this type of loan.
Put it On Your Business Credit Cards
Do you have business credit cards for normal business expenses? If so, this is another option for meeting payroll obligations without having to go through the loan process.
Just keep in mind that you’ll need to pay off the balance as quickly as possible in order to avoid interest fees and late fees.
Try to Settle Your Accounts Receivables
When you have past-due payments from customers, you’d be wise to request payment as quickly as possible. This will increase your cash flow, which will provide funds to be used to meet payroll.
Request an Extension of Your Accounts Payable
On other hand, you might have outstanding debts to vendors or suppliers. If you have a history of paying your bills on time, perhaps request a 30-day extension so that you can use those funds for payroll.
A Guide to Solutions for When You Can’t Make Payroll
Your employees are the most important part of your business. Fortunately, these payroll financing solutions will help everyone get paid on time even when you can’t make payroll.
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