Business insights and growth highlights

How Landscaping Companies Can Benefit From Payroll Financing

Apr 26, 2022 by Morris Reichman

Much like construction companies, landscaping companies often face cash flow issues for a variety of reasons. First and foremost, the landscaping industry is especially sensitive to changes in season. Most individuals and businesses do not require landscaping services in the winter months, which means that cash flow issues can arise for many landscaping businesses as soon as the temperature drops and the grass stops growing. Fortunately, payroll financing offers an affordable solution to help keep landscaping companies afloat while they wait for the busy season to return.

Why Landscaping Companies Struggle With Cash Flow

Landscaping businesses of all sizes often work through invoices with businesses and individuals. This means that, in the vast majority of cases, the company does not get paid when the work is done. Instead, the customer or client has a period of time to pay the open invoice. This time can vary anywhere between 10 days and 3 months. It all depends on the terms that the landscaping business has arranged with its client.

As a result, cash flow can become an issue due to delayed payments. When you couple this issue with the significant reduction in business during the winter months, it shows that most landscaping companies struggle to keep full-time staff and have cash on hand at the same time. This leads many to construction factoring, which is not the best way to secure a line of credit for contractors and staff. Instead, payroll financing offers better terms and greater security when cash flow issues arise.

The degree to which a landscaping company experiences cash shortages depends on the type of clients and projects it takes on. For example, a larger landscape contractor that handles regular landscaping needs for other businesses will have plenty of business in the spring, summer, and fall. However, the business will slow down in the winter. Moreover, large businesses often have more power to negotiate better payment terms for themselves. This usually means longer wait times for invoices to be paid.

Alternatively, a small lawn care business may choose to take on individual customers who simply need a lawn mowing service from time to time. Though these companies may be able to have cash in hand at the end of the workday, they also have to deal with seasonality issues. The owner of a lawn care business also may have difficulty growing if they do not expand into contracts with larger businesses.

What Payroll Financing Can Do For Your Landscaping Business

Payroll funding and financing give your business a quick influx of cash to handle payroll costs. If you own a landscaping business, this means you can keep your employees paid, even when business slows down or your clients are not paying invoices quickly. Fortunately, a payroll finance loan is accessible to most small and medium-sized businesses and has flexible repayment terms. In short, payroll financing can ensure that your business can continue running smoothly year-round.

Cash flow issues may affect many landscaping companies, but it doesn’t have to be the case for your business. If your organization requires a small business loan for payroll to operate efficiently, call Payro Finance today to see how we can help.

Morris Reichman

hello@payrofinance.com

Morris Reichman is the founder and CEO of Payro Finance. Former Vice President at Infinity Capital Funding an alternative finance company, Morris possesses a versatile background in the finance industry. Having spent 7+ years working across global macro operations and start up corporate finance Morris's expertise is in business accounting, risk management and investment analysis. Morris founded Payro Finance to support business owners and ensure their business continuity.