Paychex Debuts Working Capital Offering for SMBs

Human capital management software solutions provider Paychex has introduced a working capital offering.

Paychex Funding Solutions, announced Tuesday (Nov. 12), is designed to provide small- to medium-sized businesses (SMBs) with fast access to capital as needed.

“Lack of capital is the top reason that small organizations go out of business — and meeting payroll obligations can be one of the biggest hurdles, regardless of the economic climate,” Liz Roaldsen, Paychex’s senior vice president of operations and customer experience, said in a news release. “Quick access to capital when a company needs it can be the difference between a business being able to remain open or closing its doors.”

Paychex Funding Solutions – which provides up-front capital based on a business’s assets through invoice factoring – is a solution for payroll, vendor payments and growth reinvestment, available to any business-to-business organization, even non-Paychex payroll clients.

The company said this solution offers more flexibility than traditional bank loans, with funding decisions based, in part, on a business’ customers’ creditworthiness, letting Paychex serve organizations that might not qualify for standard loans.

Recent research by PYMNTS Intelligence finds that more than 80% of chief financial officers and treasurers have used working capital solutions, a 13% increase year over year.

“However, these finance function leaders are no longer content with generic, one-size-fits-all offerings; they seek tailored financial services that align with their strategic growth agendas and operational realities,” PYMNTS wrote last week. “No longer satisfied with the status quo, forward-thinking finance teams want solutions that cater to their specific industries, spending patterns and business requirements.”

As that report noted, the approval process is an obstacle CFOs and treasurers face in finding working capital. While there is a common perception that the cost of capital is a concern, CFOs and treasurers say that approval speed is in many situations the more crucial factor.

Just 3% of middle-market firms said they enjoyed smooth access to working capital solutions, highlighting the obstacles companies encounter — making an application process with minimal friction or wait time before approval a vital consideration for working capital providers.

“The demand is for digital-first, streamlined services with faster approval processes that remove bureaucratic obstacles and align with a company’s growth trajectory,” PYMNTS wrote. “Traditional working capital solutions, with their lengthy approval timelines and limited personalization, increasingly fall short of meeting these expectations.”

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