A simple credit card can keep your employees paid…and happy.

It’s almost the 15th of the month, and payroll is due next week. But you don’t have enough cash to cover it. What are you going to do? Don’t panic! This scenario is common among small business owners. The demands of running a business often cause people to forget about the mundane financial and administrative obligations, and certainly the planning of cash flows is simply out of the picture. And though the business may be billing enough revenue to cover all the expenses, converting that revenue into cold hard cash is quite another endeavor. So when the cash in the bank is just short of the amount needed to fund payroll, what do you do?

Unfortunately there’s not too much you can do at the moment…except borrow whatever money you can, or break the news to your employees that pay day is going to be a bit short this month. But take this as a valuable lesson for the future. You must plan for these occurrences. Because this is not the last time it’s going to happen to you. So be prepared next time.

The best way to be prepared is to secure a line of credit. Go to your local bank, and ask them for a credit line equal to the amount of your normal payroll. But what if you have bad credit? That may not be an issue. Oftentimes, banks will secure the line of credit with your normal receivables level. So if you normally bill an amount that is above the amount to cover the payroll (and you really should be), then they should be able to give you a line of credit that is sufficient. And, by the way, there is a bonus to this: By securing a line of credit, you will also start to build the credit history of the business. Like a personal line of credit, you will be able to borrow bigger quantities of money over time.

Credit is your asset in the world of business. So make friends with your local banker, and secure a line of credit as soon as possible. And of course, if you need help getting the line of credit…we can certainly help you! Schedule a free consultation with us and let’s chat.