Even after many years in the commercial finance industry, it’s still shocking to hear small business owners talk about struggling to make payroll. There are always all sorts of reasons for this uncomfortable situation.

No matter what industry you’re in, making payroll is at the top of the priority list for many business owners. Most employees won’t work for very long if they aren’t getting paid. If your staff walks out the door, your ship is sunk. Because of this, many businesses have some form of payroll financing in place to make sure cash is always available to take care of payroll.

The Situation

On October 2, 2012 TD Bank released a study of 400 small businesses with annual sales of less than five million dollars across the Eastern United States. What they found was that stress for small business owners is on the rise, and managing their business finances is the biggest single cause. 

As a small business owner or manager, you work hard to ensure that revenue is generated, expenses are managed well and profits are made. Along with that, you make sure your business cash flows efficiently and you are able to service your debt, pay general and administrative expenses, and make payroll. You’re running a tight ship that’s the product of your handiwork.  

One of the biggest stress factors for a small business owner is making sure that they are able to make payroll. Over the years, I have heard this repeatedly from my clients, friends and family members that are small business owners because they know they are responsible for another person’s (and their family’s) livelihood.