9-min read Jun 16, 2022

Three Pay Periods to Cover in One Month? No Problem With Help From Payro!

Three Pay Periods to Cover in One Month? No Problem With Help From Payro!

Small business owners find that they often have to accomplish a lot with a limited amount of resources. Some activities must take place no matter what; one of them is ensuring that your employees are paid on time, every time. While that’s doable most months, what happens if you find yourself unable to fund a payroll?  There is a solution that will help you get past this temporary obstacle: get a payroll business loan.

Not every small business owner is familiar with the concept of a business payroll loan. It’s a great way to leverage your cash flow and ensure there’s money for your upcoming payroll. Even if you think this is something that you will never use, it makes sense to learn about how this type of loan works, when it’s appropriate for use, and what you can expect from Payro. Here are some essentials that will help you get started.  

payroll funding for small business
Image source: https://pixabay.com/illustrations/loan-agreement-signature-business-4273819/

What is a Payroll Loan?

As the name implies, a payroll loan is a type of lending arrangement that allows the recipient to secure enough cash to cover one or more payroll periods. Typically, there are basic qualifications that candidates must meet. For business owners who do qualify, the funding can usually be in place in a couple of business days.

Once approved, Payro will initiate an electronic deposit that places the funds directly into the business owner’s bank account that’s used for payroll purposes. From there, the funds can be used to handle direct deposits to employee bank accounts, cover paper payroll checks, or handle any other task associated with the payroll process.

When Can Such a Loan Be Needed?

There is more than one reason why this type of funding may be needed. One example has to do with a larger client who is somewhat slow about paying outstanding invoices. Many small business owners depend on customers paying their invoices within 30 to 45 days. If that doesn’t happen, a temporary cash flow issue arises.

payroll financing company
Image source: https://pixabay.com/illustrations/account-accounting-audit-budget-3924281/

That could affect any payroll period, but what if this happens to be a month when there’s an extra payroll period to fund? Instead of turning to other methods, opting to go with payroll financing for small businesses is often the best solution.  

The Stress of Meeting Additional Payrolls in Certain Months

Many small business owners pay their hourly and salaried employees every other week. That means if Friday is the payday in your company, there will be four months out of the year when you must meet three payrolls rather than two. Even when you plan in advance to ensure the payroll account is properly funded, situations may arise where there just isn’t enough to go around.

business payroll loans
Image source: https://pixabay.com/illustrations/money-finance-cash-coins-3269654/

There’s no need to stress about how to manage that third payroll during one of these four months. By all means, prepare to the best of your ability. If other matters arise that make it impossible to set aside enough funds on your own, securing this type of loan takes all the worry out of the situation. The money will be in the account in plenty of time for you to process that third payroll and ensure everything is done on time. 

And the Strain on Your Cash Flow

Few, if any small businesses ever reach a level of financial security in which there are no worries about how quickly payments for services rendered arrive. Cash flow is what keeps the company going. In the best of circumstances, the cash flow is steady enough that you can maintain a plan to cover everything without drawing on any other resources.

The thing is that cash flow can be adversely affected in several ways. Unexpected expenses can drain off some of what’s coming in. The loss of a major client can mean a decrease in cash flow until you have more customers to fill in the gap. Even issues like fire or water damage that interfere with operations could mean lower revenue generation and ultimately less cash flow.

Whatever the situation, business payroll loans from Payro can help the business get through the rough spot. Employees still get paid, and you have the time needed to stabilize the cash flow once again.

What About The Fees Associated With Payroll Funding?

If you’re wondering about the fees and other charges that come on some type of payroll finance loan, rest assured you’re asking a valid question. With Payro, you have access to the most competitive fee structure around today. You’ll also know the complete fee schedule up front, and how those fees apply to the loan balance.

You can depend on Payro to be completely transparent about all fees that apply to the lending arrangement. That makes it easy to budget how you will make use of the funding, how your account balance is credited with payments received, and what you can expect when it’s time to seek more funding. The process is streamlined, so there are never any surprises. That can go a long way toward keeping the company’s finances in order.

Here’s what you may not realize until after you check into funding through Payro; there’s a good chance that the overall arrangement will end up costing less than other methods of obtaining cash for payroll and other business functions. See this as a way to arrange your finances so that you obtain the maximum benefit while incurring the least expense.

Establishing a Working Relationship With Payro

When you’re seeking payroll funding for small business purposes, the key thing to remember is that you want to do your part to ensure the relationship goes smoothly. Start the process by making sure you understand how the funding works. If you have any questions about what is done and when it happens, the time to ask is before the first funding begins.

Ask any questions that come to mind, and make sure to listen closely to the responses. Taking the time to do so will help minimize the potential for any misunderstandings later on. You will also set reasonable expectations on your end regarding when the funding will arrive and what will occur in the weeks following.

Make sure that you provide all the data that’s requested. It’s a good idea to check it twice before remitting the information. Your goal is to ensure that Payro will have no trouble evaluating the data and be able to make a decision about the funding promptly.

Always be up front about any upcoming changes in your business model, especially those that might impact the process of future fundings. This provides a chance for both parties to take a fresh look at the arrangement and decide if it should continue. At the very least, your willingness to provide those updates is indicative of your desire to be transparent.

Understanding What Payro Does in Return

There are also things that Payro will do in order to continue the relationship. Prompt assessment and rapid funding to the bank account of your choice are key elements. Since you want the money for business purposes as quickly as possible, knowing it won’t take several days for it to appear is a major plus.

Keep in mind there are small business owners who opt to continue using this type of funding on an indefinite basis. Once you do give it a try when there’s a month coming up with three pay periods, the idea of using every month may seem like the way to go.  In fact, if this method helps to ensure the company meets its obligations on time and eliminates late fees and charges that would otherwise be imposed by your vendors and suppliers, this could be something you want to do for the long term.

Peace of Mind For You

The typical small business owner has a great deal on his or her mind. Adding worries about meeting a pending payroll doesn’t make things any better. By working with Payro and having access to funding when it’s needed, there’s one less thing to worry about. While there are still other aspects of the business that command attention, at least this one is settled.

funding company
Image source: https://pixabay.com/illustrations/balancing-time-and-money-idea-2939271/

Think of what this means to the day-to-day operations of the business. Thanks to the funding arrangement, there’s cash in hand to handle payroll. This puts you in a position of plowing through the month’s Payables and taking care of the bulk of them now, while still setting aside the money to take care of this month’s three pay periods. With financial concerns addressed, you can focus more of your energy on things like improving infrastructure, increasing sales efforts, and freshening the marketing plan.

And For Your Employees

The peace of mind that comes with having access to business payroll loans is not limited to you. Employees depend on receiving their pay on time for a number of reasons. They like to eat, keep roofs over their heads, and pay their bills on time. When payroll is delayed, even for a couple of days, that can create issues for them that may include having to pay late fees or penalties. You do not want that to happen to the people who are making the business operation profitable.

See setting up this arrangement as a good way to ensure your employees remain happy and don’t get stressed out because payroll is late. They will appreciate the effort, and likely reflect that in the way that they show up every day, get their work done, and in general ensure that they are helping the business to succeed.

If you’ve never considered this type of funding help for meeting those third monthly payrolls, or even as a way to compensate for a temporary cash flow issue, spend some time talking with a Payro associate and exploring this option today. A payroll loan may be just what you need.

Morris Reichman


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.

Need a short-term loan to cover payroll?

Apply in under two minutes, and get approved within 2 days. Once approved, funds are in your account the same day.

  • Always 1.5% weekly
  • Up to $500,000
  • Same-day funding
No credit impact | Takes under 2 minutes