follow us:Google+ FacebookLinkedInTwitterRSS Feeds

advertisement

Federal shutdown creates surge in applications for payroll lender

By

Back to Top Comments Email Print
Lawmakers in D.C. are still ironing out the shutdown and trying to avoid a default, while small businesses who do government work are seeking loans to cover payroll.
Lawmakers in D.C. are still ironing out the shutdown and trying to avoid a default, while small businesses who do government work are seeking loans to cover payroll. - (NJBIZ File)

It's not unusual for companies to borrow money to cover payroll expenses until receivables are collected. In fact, Boonton-based Payroll Financing Solutions said it gets between 50 and 100 requests for such loans in a typical week.

However, the ongoing shutdown of the federal government has caused the company's daily incoming requests to skyrocket.

Stephen Halasnik, managing partner at Payroll Financing, said today his company now receives hundreds of requests per day from small firms with government business.

"The requests have been escalating to where we are seeing double or triple the requests daily from business owners who are saying the same thing — 'I can't pay my employees because the government isn't paying my bill, and I don't want to let my people go,' " Halasnik said in a statement.

According to the announcement, companies with annual sales of between $350,000 and $7 million come to Payroll Financing for short-term emergency loans of $5,000 to $100,000 to pay employees.

The government shutdown has yet to affect gas prices, and has not yet factored into cautiously optimistic numbers like a slight increase in business-to-business sales. But, Halasnik said, for small businesses that depend on the government for some of their revenue, "the margin of error to make payroll is usually tight."

Small businesses aren't the only ones feeling financial strain as the shutdown continues. Federal employees, some of whom are furloughed and some of whom are working without pay, are owed an estimated $2.7 billion in salary. That number comes from information in agency contingency plans submitted to the U.S. Office of Management and Budget, as well as data from the Asbury Park Press DataUniverse, all compiled by public data website Enigma.io and updating in real time at their web page about the shutdown.

 

Share This Story On:

Write to the Editorial Department at editorial@njbiz.com

advertisement

Comments


Be the first to comment.



Please note: All comments will be reviewed and may take up to 24 hours to appear on the site.

Post Comment
     View Comment Policy

Advanced search
Sponsored by
advertisement
  
  
advertisement
  
  
advertisement
Back to Top