Businesses Can Make Payroll and Keep Employees Happy With a Payroll Funding Company

In a Nutshell: Not making payroll on time is a damaging blow to any business. Payro is a payroll funding firm that provides short-term, affordable financing so business owners can make payroll and keep their employees happy and motivated. The company’s transparent approach to pricing and exemplary customer service have helped Payro spur customer loyalty and achieve significant growth.

Amazon is one of the greatest success stories in the history of eCommerce. If you’re like me, you check out daily deals on Amazon to see the offerings of the moment. Amazon’s innovative business model and use of new technologies position it as one of the most powerful forces in the business world. 

But Amazon would likely experience some hiccups in its operations if all of its employees simultaneously took two weeks of vacation. Some say a business’s most valuable assets are its employees. When people own something of value, they take care of it, and successful businesses operate in the same way.

Businesses compensate employees for the work they perform for them. If a business can’t make payroll, even once, then its employees may think twice about continuing to work for the company. And others in the workforce who learn of a business’s struggles to pay employees likely won’t be eager to join the company.

Payro is a payroll funding company that ensures businesses are never late in paying their employees. We spoke with Greg Javins, Payro’s Director of Partner Relations, to learn more about Payro’s unique offering that helps companies stay in business.

Payro started in 2019 after its Founder and CEO, Morris Reichman, attended a conference for certified public accountants (CPAs). Javins told us that Reichman was chatting with a CPA at the conference who told him that he was unable to sleep at night because he had loaned money to a client of his to help him make payroll. The CPA told Reichman he was worried that his client wouldn’t pay him back in a timely manner.

Javins said that conversation led Reichman to realize that companies have a need for additional funds at times to process their payroll. Businesses don’t have as many options to pay their employees as they do to pay vendors.

“One of the biggest things that many people don’t know is that payroll is one of the only things that you can’t put on a credit card, so you have to have cash in the bank to cover those funds,” Javins told us. “Of course, if you don’t pay your employees, you risk having them not show up for work. Based on what field you’re in, especially if it’s a medical field like in-home healthcare, you could face liability issues if a service provider were to not show up to take care of a patient.”

Many people miss payment due dates on their credit cards or utility bills when they’re short on funds and payday is still a few days away. I’ve been in more than a few situations when I wasn’t sure if I could cover expenses before the next payday rolled around.

Businesses also must wait from time to time for their customers to pay invoices. Late payments from customers can affect a business’s ability to make payroll, and missing payroll can lead to more than just a group of unhappy employees.

Employers can face legal ramifications if they’re unable to pay their employees on time. Javins told us that, though laws vary from one state to the next, the legal impact to an employer when they don’t pay their employees on time can be severe. 

Payro works with companies of various sizes, from small businesses to larger enterprises. Javins told us the company will fund payrolls from $5,000 to $500,000. The average loan amount Payro provides to help a business pay their employees is $40,000.

Payro lends to businesses across the U.S., and, on average, its customers borrow from the company four times per year and repay those loans within three weeks.

“Payro was designed to cover payroll for companies when their cash flow, which can have its ups and down, is low,” Javins told us. “We’re not designed to be used by a company every time they have to pay their employees. But you may be waiting on the timing of incoming cash as far as when you’ll receive the payment and when payroll is due, and that’s where we see people borrow from us.”

Businesses have other options when they need to make payroll on time. They can apply for financing from their bank, but Javins told us it’s getting more difficult for small businesses to obtain a line of credit from their bank. 

As banks tighten the qualifications for short-term financing, the pool of businesses looking for novel funding options like those offered by Payro grows.

“We’re a very short-term lender as our customers pay us back in one to four weeks, and there’s no penalty for early repayment,” Javins told us. “Some businesses take out merchant cash advance loans, but they usually come with high interest. Those loans can cause a business to spiral because they don’t allow early paybacks, so you’re paying through the entire term on a daily or weekly basis to get that loan down.”

Lending products that come with variable interest rates tied to benchmarks, such as the Federal Fund Rate, can help you save money when the benchmark rate plummets. But should the opposite occur, you could find yourself with an unfavorable interest rate that compounds cash flow problems. When it comes to lending products, sometimes it’s better to go with the sure thing — a fixed rate.

Payro’s funding comes with a fixed rate of 1.5%, a rate that has remained the same since the company’s inception, Javins told us. 

“We’re very proud that we’ve been able to keep the interest at that rate,” Javins told us. “Of course, we have some people that look at it from an APR perspective, but it’s not really fair to do that because we’re not designed to be used every week of the year. Breaking our rate down to its most basic form, if someone takes out a loan for $10,000 with us, they’re only going to pay $150 per week in interest.”

Payro prides itself on being transparent with its customers, and the company holds itself to high ethical standards, according to Javins. He told us that many customers have said they wish they had known about Payro before taking out a merchant cash advance loan. 

Anyone who owns a business, or has taken an introductory course in business management, knows it’s often cheaper to retain a customer than it is to acquire a new one. Javins told us Payro excels in customer retention. 

“When times are tight as far as cash flow is concerned, businesses still have to pay their employees,” Javins told us. “We’re that ripcord people can pull to get a financial parachute. People want to keep this particular line of credit intact, above all others, so they have that lifeline there for them when they need it.”

You’ve probably heard the expression “time is money” before. Businesses that come to Payro are already a little short on money, so the last thing they want is to be pressed for time as well.

Javins told us it takes customers only five to 10 minutes to fill out an application for Payro’s funding. Payro requires businesses to submit six months of bank statements and conducts a soft credit pull to assess an applicant’s credit history. Once Payro receives an application, it can make a funding decision within 24 to 48 hours.

“We work really closely with a lot of payroll providers to offer to their clients to put this line of credit in place before they need it,” Javins told us. “That way, they’re assured that if they do need it six months down the road, they’re already approved and the funds are there.”

Payro’s customers operate in a variety of industries and include healthcare providers, construction companies, and law firms. A commonality among Payro’s customers, Javins told us, is their gratitude to the company for its service and pricing model.

Customers can call Payro with questions and receive hands-on support. Javins told us the company’s entire support team is based in the U.S. Payro’s headquarters are in Virginia, and it also has teams in Georgia and New Jersey. 

Payro has grown significantly over the past year, and Javins told us he expects that to continue in the near future.

“Our CEO’s principle is that we always do the right thing by the customer because that is doing the right thing by the company,” Javins told us. “We truly care about our customers and helping them stay in business because that not only helps the economy, but it also helps business owners and their families.”