Best Payroll Loans
Cover payroll gaps with lenders like OnDeck, which can fund in as little as 30 minutes, or Credibly, which accepts business owners with credit scores as low as 550.
- Payroll loans aren’t a single product. Businesses often use lines of credit, revenue advances or invoice factoring to cover payroll gaps.
- Funding can arrive the same day. OnDeck can fund in as little as 30 minutes, while many online lenders deliver within 24 hours.
- Payroll financing can cost significantly more than traditional business loans, so compare total borrowing costs, not just starting rates.
- Lower credit scores and newer businesses can still qualify. Credibly accepts scores as low as 550, while Fundbox requires only three months in business
This page covers business payroll loans — financing for business owners to cover employee wages. If you’re an employee looking for a paycheck advance, check out LendingTree’s guide to payday loans.
| Lender | User rating | Best for | Starting rate | Amount | Term | |
|---|---|---|---|---|---|---|
|
Same-day funding | 35.26% (APR) |
$5k – $400k |
Up to 24 months | ||
|
Recurring funding | 3.30% (monthly interest rate) |
$5k – $100k |
12 to 24 months | ||
|
Fluctuating revenues | 13.00% |
$5k – $1.5M |
4 to 18 months | ||
|
Unpaid invoices | 0.75% (factoring fee) |
$30k – $5M |
Not specified | ||
|
Traditional banking | 8.25% | Starting at $10k | Starting at 12 months | ||
|
Startups | 4.66% | Up to $250k | 3 to 24 months | ||
|
High credit card sales | 11.00% |
$5k – $600k |
3 to 24 months |
Our top picks for payroll loans
Best for: Same-day funding – OnDeck
- Starting rate
- 35.26%
Minimum APR offered to at least 5% of customers (not the lowest rate offered)
- Same-day funding available
- Transparent qualification requirements
- Soft credit check during initial application
- High starting interest rates
- Instant funding transfers capped at $10,000 per day
- Funding not available in North Dakota
If payroll is due tomorrow and cash flow is tight, OnDeck is your fastest financing option. With its “Instant Funding” feature, borrowers can transfer line of credit funds directly into an eligible business checking account in as little as 30 minutes. However, instant funding is only available for established accounts — you cannot get funding the day you submit your application.
OnDeck’s application process takes just minutes to complete and doesn’t require a hard credit check. While many banks don’t disclose their eligibility criteria, OnDeck publishes all requirements upfront, so you know where you stand before applying.
Still, borrowing from OnDeck isn’t cheap. Its starting annual percentage rate (APR) for a line of credit is 35.26%
→ Check out LendingTree’s full OnDeck review.
- Minimum credit score: 625
- Minimum time in business: 12 months
- Minimum annual revenue: $100,000
Best for: Recurring funding – Headway Capital
- Starting rate
- 3.30%
Minimum rate of 3.30% monthly interest + 2% draw fee for lines of credit in most states
- Funding available as soon as the next business day
- Starting rates as low as 3.30%
- No prepayment penalty
- 2% draw fee may apply in some states
- Not available nationwide
- Credit score requirement not disclosed
If you need payroll funds on a regular basis, Headway Capital’s business line of credit works like a revolving account — borrow up to your limit, make weekly or monthly payments and draw again as needed.
Its starting rate of 3.30% is one of the more competitive rates available for a business line of credit, though your final rate will depend on your personal and business financial history.
Headway Capital isn’t available in Arkansas, Connecticut, Michigan, Montana, Nevada, North Dakota, Rhode Island, South Dakota or Vermont. A 2% draw fee applies in most states, with exceptions for Colorado, Georgia, Indiana, New Jersey and Oklahoma.
→ Check out LendingTree’s full Headway Capital review.
- Minimum credit score: Not specified
- Minimum time in business: 12 months
- Minimum annual revenue: $50,000
Best for: Fluctuating revenues – Fora Financial
- Starting rate
- 13.00%
Fora Financial’s minimum rate is a 1.13 factor rate. This means you’d repay 13.00% (plus any additional fees) on top of the amount borrowed.
- Borrow up to $1,500,000
- Early repayment discount available
- Funding available within 24 hours
- Factor rates make borrowing costs harder to compare
- Charges a 3.00% origination fee
- Doesn’t help build business credit
Businesses with fluctuating revenue should consider Fora Financial’s revenue advance. Instead of a fixed repayment schedule, payments are based on a percentage of your daily or weekly sales, meaning you’ll owe less when business is slow. Funds arrive within 24 hours of approval, and paying the loan off early earns a discount.
However, Fora Financial charges a 3.00% origination fee and uses a factor rate instead of a standard interest rate. Convert the factor rate to an APR before signing so you have a clear picture of total borrowing costs.
→ Check out LendingTree’s full Fora Financial review.
- Minimum credit score: 570
- Minimum time in business: 6 months
- Minimum annual revenue: $240,000
Best for: Unpaid invoices – altLINE
- Starting rate
- 0.75%
Invoice factoring fees are charged per invoice, with altLINE’s factoring fees ranging from 0.75% to 3.5% per invoice.
- No minimum credit score or time in business required
- Same-day funding available
- Backed by Southern First Bank, an FDIC-insured institution
- Charges an origination fee
- Requires creditworthy customers
- Files a UCC lien on your business
If your company is waiting on unpaid invoices, altLINE, an invoice factoring company, advances up to 90% of the invoice value and handles collections on your behalf. Once your customer pays, altLINE sends you the remaining balance, minus its fees.
Qualification is based primarily on your customers’ creditworthiness, not your own, making it a strong option for businesses with limited credit history. That said, factoring costs add up. altLINE charges origination fees as high as $500 on top of its standard factoring fee.
altLINE doesn’t impose the traditional minimum credit score, annual revenue and business history requirements you may see with a traditional bank. It will, however, run a background and credit check to look for financial felonies while reviewing your invoices to determine your customers’ credit quality.
Best for: Traditional banking – Bank of America
- Starting rate
- 8.25%
- Access to broader business banking services
- No collateral required
- Rate discounts available for Bank of America Preferred Rewards members
- Charges an annual fee (waived for the first year)
- Not a fit for newer or lower-credit businesses
Companies wanting to consolidate their business banking and payroll financing in one place should look at Bank of America. It offers an unsecured business line of credit with no collateral required and a starting rate of 8.25% — competitive for a traditional bank product.
This line of credit is built for established businesses with strong revenue histories. Early-stage startups or businesses with limited credit profiles may not meet the 700 minimum credit score or 24 months time-in-business requirements. The product is also subject to an annual review with a $150 renewal fee, waived the first year.
→ Check out LendingTree’s full Bank of America review.
- Minimum credit score: 700
- Minimum time in business: 24 months
- Minimum annual revenue: $100,000
Best for: Startups – Fundbox
- Starting rate
- 4.66%
12- to 52-week terms, or up to 104 weeks in certain limited situations
- Only 3 months of business history required to qualify
- Low annual revenue requirement ($30,000+)
- No prepayment penalties
- May require a personal guarantee
- Payments must be auto-debited from your account weekly
Startup businesses needing payroll financing should consider Fundbox. The company offers a line of credit of up to $250,000 with only a three-month business history requirement. Its starting interest rate of 4.66% for the 12-week repayment plan is competitive, with funding available in all 50 states.
However, Fundbox may require a personal guarantee, meaning you’ll be personally responsible if the business fails to repay the debt. Payments must be auto-debited from your business bank account weekly, unless you subscribe to Fundbox Plus. Funding can take up to two business days.
→ Check out LendingTree’s full Fundbox review.
- Minimum credit score: 600
- Minimum time in business: 3 months
- Minimum annual revenue: $30,000+
Best for: High credit card sales – Credibly
- Starting rate
- 11.00%
Credibly’s minimum rate is a 1.11 factor rate. This means you’d repay 11.00% (plus any additional fees) on top of the amount borrowed.
- Same-day funding available
- Accepts credit scores as low as 550
- Only 6 months of business history required
- $240,000 annual revenue requirement is higher than most lenders on this list
- Factor rate makes it hard to calculate total borrowing costs
If your business processes mostly credit card sales, Credibly’s merchant cash advance (MCA) is worth considering for payroll needs. A merchant cash advance lets you repay what you’ve borrowed using a portion of your daily debit or credit card sales, which may explain why the revenue requirements are on the higher side.
Credibly requires just 6 months in business and a minimum credit score of 550, making it a fit for startups or borrowers with limited credit history. The tradeoff is cost. Merchant cash advances typically run higher than traditional business loans, so convert the factor rate to an APR before committing.
→ Check out LendingTree’s full Credibly review.
Minimum credit score: 550
Minimum time in business: 6 months
Minimum annual revenue: $240,000
What is a payroll loan?
Payroll loans are short-term small business financing options that help business owners cover employee wages when cash flow doesn’t line up with payroll deadlines.
There isn’t one specific “payroll loan” product. Businesses typically use a business line of credit, revenue advance, short-term loan or invoice factoring, depending on their cash flow situation.
Payroll financing can help cover wages, payroll taxes, employee benefits, commissions and contractor payments.
Is a payroll loan right for your business?
When a payroll loan may make sense:
- Payroll is due within days and you’re facing a temporary cash flow gap.
- You have incoming revenue, unpaid invoices or future sales that can support repayment.
- The cost of borrowing is lower than the cost of missing payroll.
When to avoid payroll financing:
- Cash flow problems are ongoing or structural.
- You would need to borrow repeatedly just to cover payroll.
- Repayment costs would create additional financial strain.
- You qualify for lower-cost financing options.
How to reduce the need for payroll financing:
- Maintaining a cash reserve for at least one payroll cycle.
- Following up on invoices before they become overdue.
- Negotiating longer payment terms with vendors.
- Forecasting seasonal revenue slowdowns in advance.
- Reviewing expenses, pricing and profit margins regularly.
Types of payroll loans
The best payroll financing option depends on how quickly you need funds, how your business generates revenue and whether you need recurring or one-time access to capital.
Short-term business loans
Best for: Startups or borrowers with limited credit that need fast funding.
Short-term business loans provide a lump sum repaid in fixed daily or weekly installments over three to 24 months. Online lenders typically have more flexible requirements than traditional banks, with funding available as soon as the next business day. Borrowing costs, however, can be significantly higher than traditional business financing.
Business line of credit
Best for: Businesses that want a reusable funding source for ongoing or seasonal cash flow gaps.
A business line of credit lets businesses borrow as needed and draw funds again as balances are repaid. Borrowers typically only pay interest on the amount they use. Terms can range from 12 weeks to five years, though some lenders also charge origination, maintenance or draw fees.
Merchant cash advance
Best for: Businesses with strong credit card sales looking for flexible repayment.
A merchant cash advance (MCA) provides upfront funding that’s repaid through a percentage of future debit and credit card sales. Payments typically decrease when revenue slows down, but borrowing costs can be expensive. MCA providers also use factor rates instead of APRs, which can make costs harder to compare.
Invoice factoring
Best for: Businesses waiting on unpaid invoices to cover payroll.
With invoice factoring, businesses sell unpaid invoices to a factoring company in exchange for an upfront advance — often up to 90% of the invoice amount. The factoring company then collects payment from customers and sends the remaining balance minus fees.
Invoice factoring can also be easier to qualify for than traditional payroll financing because approval depends more on your customers’ creditworthiness than your business credit score.
Failing to make payroll can create serious financial and legal problems for a business. Depending on your state and the circumstances, missed payroll may lead to:
- Wage theft claims or labor law violations
- IRS penalties and interest for unpaid payroll taxes
- Lawsuits from employees or contractors
- Damage to employee trust and retention
- Additional fees, penalties or collection actions
Some states may reduce penalties if missed payroll was caused by a good-faith mistake or temporary oversight. Even so, businesses are still responsible for paying all wages owed.
If cash flow timing is the problem, not long-term profitability, payroll financing may help businesses avoid missed payroll deadlines and related penalties.
How to compare payroll loans
Payroll loans vary significantly by cost, speed and repayment structure. Here’s what to weigh before committing:
Interest rate or factor rate
Compare total borrowing costs, not just the advertised starting rate. If a lender uses a factor rate instead of APR, convert it before comparing offers.
Funding time
If payroll is due soon, compare how quickly each lender can deliver funds after approval. Some online lenders fund the same day, while banks may take longer.
Repayment method
Lines of credit, invoice factoring and merchant cash advances all handle repayment differently. Choose a structure that fits how your business receives revenue.
Repayment term
Short repayment terms may reduce total interest but can strain cash flow. Longer terms offer more breathing room but may cost more over time.
For qualified users, LendingTree’s small business concierge service connects you with an expert who can help you compare loan options and choose the best fit for your business needs.
This individualized approach helped LendingTree’s small business concierge service connect more than 5,000 borrowers with over $300 million of loans last year.
Alternatives to payroll loans
-
Traditional business financing
SBA loans and working capital loans may offer lower rates and longer repayment terms, but approval can take weeks. -
Collect overdue invoices
If unpaid invoices are causing the payroll gap, follow up with customers, offer payment plans or consider early-payment discounts. -
Use a business credit card
A business credit card may work for short-term, recurring expenses, but avoid carrying a balance if the APR is high. -
Consider a personal loan
Some lenders allow personal loans for business expenses. This may be easier to qualify for, but you’ll be personally responsible for repayment. -
Cut expenses or adjust pricing
If payroll gaps happen regularly, review your expenses, pricing and profit margins to identify longer-term cash flow problems. -
Look for grants or special financing
Small business grants, local programs or special financing may be available, especially for startups, innovative businesses or woman- and minority-owned businesses.
Our methodology
We looked at over 30 payroll loan lenders to come up with the seven best picks. Here’s a closer look at the criteria we used to make our selections:
- Funding time: We prioritized lenders who were able to provide funding within two business days or less.
- Funding method: We tried to select lenders who offer various types of financing in order to allow business owners to select the method that works best with their business model.
- Interest rate: We weighted lenders more heavily if they advertise interest rates that are lower than competitors. We also factor in transparency around rates and fees.