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Return To Cash Flow Article Archive   Payroll Finance - A Cash Flow Secret? By Mark Dalton Payroll funding is an under used UK cash flow finance solution for businesses. Whereas factoring and invoice discounting are generally much better known methods of raising working capital, an unsecured payroll loan is a business finance option that offers an alternative to the traditional sale and discounting of invoiced trade debts route. Financing a salary or wage bill is provided by specialist lenders but as any loan is completely unsecured these schemes are only available to companies with a profitable trading history. Lenders can make fast decisions on whether they can offer a facility that offers up to 60 days rolling credit on payrolls. Where a proposal meets a positive lender response a payroll funding facility can be set up in as little as 10 working days. The charging model is the same as for debtor finance in that there is a set-up fee, a monthly facility fee and an interest charge on any outstanding balance. Other characteristics of payroll funding facilities are that it is simple and easy to set-up and operate, that can be turned on or off (i.e. is open-ended) on expiry of the initial minimum term. Additionally, a full payroll service can be utilised by those businesses that would prefer that option. As payroll finance is an unsecured business loan no extra security is required, with no directors guarantees required and is completely confidential. Any other lending arrangements or commitments a company may have are not affected by employing this way of  raising working capital. Any company that has been trading for 2 years that has filed accounts and meets the minimum criteria in terms of turnover and number of employees can qualify for a payroll loan. This specialist lending option can prove to be a smarter method of funding for many companies, payroll funding no longer a secret but a very useful addition in the commercial finance arena! To learn more we recommend reading our Unsecured Payroll Loans page for more information on the topic of payroll finance. Eland Business Services Limited are UK based Commercial Payroll Finance Brokers © Eland Business Services Limited keywords: payroll | loan | finance | wage | salary | PAYE | Invoice Discounting | Factoring | UK Financial Management Analysis

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