A small business can cover payroll by collecting money owed, drawing on an existing credit line, or comparing invoice factoring and Revenue-Based Financing. The choice must close the cash gap before the payroll service needs the funds. Fundo offers Revenue-Based Financing for business use, subject to review and approval. Its published range is $500 to $10,000. Check both the amount you could receive and when it would reach your bank.
An urgent repair may have kept the doors open. Now wages are due. Payroll financing can help bridge the gap, but each type has its own costs and terms.
Your Funding Deadline May Come Before Payday
Check your pay schedule first. The day staff get paid may come after the day your payroll service takes funds from your bank.
Ask for three details:
- The last day and time to submit payroll.
- The date and time the full cash amount must be in your bank.
- The total needed for staff pay, taxes, fees, and other amounts due with the run.
Use the payroll report to count each cost once. Then take off cleared cash you can use after other bills. Money a client still owes you is not cash in the bank.
For a broader look at which funds to preserve, see our guide to cash reserves or financing for a necessary expense.
Compare the Source of Cash and Its Effect on Later Bills
| Option | What could make it fit | What to check first |
|---|---|---|
| Collect cash owed | A client can pay before the payroll cutoff | When funds will clear; a discount cuts what you keep |
| Use an existing credit line | You have unused credit you can draw in time | Draw limits, interest, fees, and dates when payments are due |
| Sell invoices through factoring | Business clients owe you for work already done | Cash paid upfront, fees, client contact, and who bears the loss if a client does not pay |
| Use Revenue-Based Financing | Your sales and cash flow can support the terms | Net cash received, full cost, future receipts sold, and bank debit dates |
With invoice factoring, the factor usually collects from your client. A shop paid at checkout may have no invoices to sell.
Fundo’s product is Revenue-Based Financing. The other choices in this table are alternatives to compare, not a list of products Fundo provides.
You can also ask a supplier to move an unpaid bill’s due date. Get consent first. This may free cash for wages, but the bill still needs to be paid.
A Friday Deposit Can Still Leave Wednesday Payroll Short
Say a small catering firm has paid for a repair. It has $1,900 left to use for a $7,200 payroll run. That total includes taxes and related charges. These are made-up figures, not a Fundo offer.
The cash gap is $5,300: $7,200 minus $1,900.
Staff get paid on Friday, but the payroll service needs funds on Wednesday. A $6,500 client payment expected on Friday cannot cover Wednesday’s debit.
The owner needs $5,300 in usable cash by Wednesday. An offer for $5,300 may fall short if fees are taken out first.
The owner must also plan for the next payday. Some of Friday’s cash may be needed for rent or supplies. New funding debits will need room in that plan, too.
What Should a Business Know Before Applying to Fundo?
Fundo’s published funding requirements start at $1,500 in average monthly revenue. You also need at least three months in business with consistent account activity.
Fundo uses services such as Plaid to check bank data. It reviews funds paid in, cash flow, balances, and other facts about the business. Meeting the starting rules does not mean you will be approved. State and bank restrictions apply.
Fundo buys future business revenue in exchange for funds now. Its homepage also uses the term merchant cash advance, or MCA. Check the full cost and the amount of future receipts sold. Ask when bank debits start and how to seek a change if sales fall.
The terms should leave room for the next wage bill. If they only work in a strong sales week, take a closer look.
For a comparison of funding and collection methods, read our guide to merchant cash advances versus factoring.
Questions to Resolve Before You Run Payroll
Can I rely on same-day funding for this week’s wages?
Do not assume it will meet your payroll deadline. Fundo offers same-day funding subject to review and approval. Check when funds can reach your bank and when payroll needs them. An approved offer is not cash you can spend yet.
What if the payroll cutoff has already passed?
Call your payroll service right away. Ask which ways to run payroll are still open to you and what they cost. New funding does not change the cutoff on its own.
What if I need funding for every pay run?
Check prices, staff costs, and how fast clients pay. A repair can cause a brief cash gap. If wages fall short each pay run, sales may not cover costs. More funding will not fix that on its own.
Before the next major purchase, set aside the full payroll amount in your cash plan. That gives you a clearer view of what the business can spend elsewhere.
Apply for Fundo’s Revenue-Based Financing if it fits your business’s cash needs. Compare any offer with your payroll deadline and the next pay cycle before accepting. Funding is subject to review and approval.
Disclaimer:
Fundo offers Revenue Based Financing programs exclusively for business use. Any references to loan products, consumer products, or other financing forms are solely for marketing and educational purposes, aiming to differentiate Fundo's product from other similar financing options in the market.
