This is a guest post written by CardUp, an online card payments platform for cash management.
For most businesses, payroll makes up a sizeable portion of monthly overheads, ranging anywhere from 20% to 30% of a businessโ expenses. Yet, when a business experiences a cash flow crunch, these payroll expenses might not qualify for financing easily. Lenders typically only support loans that will be used by companies to grow their business, such as for investment in machinery or tech, which better assures them of repayment.
Cutting this expense out isnโt a possible option either, as there are many repercussions โ a negative impact on your employeesโ morale and a big hit on your companyโs stability.
Over 28% of Singapore SMEs face cash flow issues in the form of delayed payments from their customers. In this situation, having this large, fixed percentage of overheads in payroll is unavoidable, and this severely limits and impacts working capital on hand. Imagine if there was a way to put this large expense on credit, allowing your business greater freedom to maneuver with the increased cash flow on hand.
Turns out, there is โ with your credit cards.
Why should I put my payroll on a credit card?

Instantly tap on under-utilised, pre-approved credit
Your business credit cards typically come with a pre-approved credit limit, assigned based on a number of different factors such as the length of operation, profitability and more. This credit limit is the maximum amount of credit the banks have extended towards your companyโs use, and are oftentimes much higher than it would be for a personal credit card. However, this sum often goes underutilised, and the credit card simply becomes a tool of convenience to consolidate a companyโs dining, travel and entertainment expenses. By putting a companyโs payroll on the credit card, companies are able to better utilise this credit line โ itโs already pre-approved and available instantly, so why not?
The available credit is interest-free for up to 55 days
Many have the misconception that credit cards are tools that encourage debt, and that businesses should avoid tapping on them unless absolutely required. While it is true that credit cards come with a high interest rate for late payments, it is also an interest-free form of credit for up to the first 55 days, from the date of your transaction to when your credit card bill is due. This makes for an extremely low-cost tool to finance your business in the short-term, and should not be overlooked.
Keep operations smooth-running even with delayed customer payments
By placing your employeesโ payroll on your credit cards, delayed customer payments become less of a headache. You no longer have to worry about having to pay out your employees, freelancers and agents before your customers pay you. Your operations will continue running smoothly, since your employees still receive their salary on time, while you only pay your credit card bills when they are due up to 60 days later.
More capital on hand means bigger growth for the business
With this large expense put on your credit cards, youโd be able to have more working capital on hand to pursue other business goals. Businesses can hire more talent up front, stock up on inventory, and invest in more equipment to support the growth of the company, or even to anticipate an upcoming seasonal fluctuation in demand.
Rewards to be earned on your businessโ largest expense
Lastly, many of us are familiar with using our credit cards to rack up miles, cashback and points on our personal expenses โ so not why do the same for your business expenses? There are many business credit cards in the market that offer some form of rebates or rewards on spend, as well as other benefits such as travel insurance, dining discounts and more.
How do I make payroll payments with my credit card?
CardUp allows you to make your business payments with your credit card, regardless of whether your recipients accept card payments or not โ and this includes your payroll.
Hereโs a simple guide to getting started on scheduling your payroll payments on CardUp โ it takes only a few minutes to start making your expenses rewarding!