Making payroll is one of the biggest responsibilities of a business owner. While it isn’t always easy, there are a number of options for management to guarantee payment for their employees. In the traditional business world, one of these ways is through a line of credit.
A line of credit for a business works similar to a credit card, in that you only pay interest on the money you borrow. Additionally, with a line of credit, you receive cash in your bank account. You can’t pay payroll on credit card but can with borrowed cash. This option is great for business owners looking for short-term financing. The downside is that these products often have high APRs, making it too expensive for some companies.
Another popular funding method is through a business loan. According to NerdWallet, these loans can range from 8.5% to 99% APR. This locks the business into payments over a set term using monthly payments. This option often requires credit scores starting at about 600.
Collateralized Crypto Business Loans
For cash-strapped businesses, locking in your company to expensive, long-term debt can be a death sentence. The strain of high-monthly payments can cripple a business’ growth and make it hard for the company to succeed. Failure to make payments on these kinds of loans can also have negative effects on credit scores, making it harder to obtain funding in the future.
For companies with poor credit, there are other options for obtaining funding. One of the most popular of those is collateralized loans. This involves a business leveraging its assets towards the loan funding. The benefit of a collateralized business loan is that businesses with poor credit scores can acquire funding even with poor credit. And because the loans are backed by an asset, the interest rate and APR will typically be lower than unsecured loans (learn more about interest rates and APR here).
Collateralized loans are a great option for com that get paid in crypto but need to pay employees (or other expenses) in cash. Crypto-backed loans are a popular way to use your cryptoassets without selling. By leveraging your crypto, you can get access to USD at very affordable interest rates.
One thing to keep in mind with collateralized loans is that if the value of your collateral changes, you may incur a margin call. Margin calls happen when the value of your collateral decreases outside of a safe range. This safe range is dictated by your loan-to-value ratio. You can learn more about LTVs here.
Use Cryptocurrency to Fund Payroll Expenses
Business owners now have the option to fund their companies using cryptocurrency assets. Companies like ICCL allow cryptocurrency owners to leverage their crypto investments towards receiving USD funding. Structured as a collateralized loan, ICCL’s business owners can take out a three, six, nine, or twelve month loan starting at a 3.2% interest rate.
ICCL supports business owners worldwide, providing low-cost credit in countries where people do not typically have access to similar rates. Our loans are legally compliant and client assets are stored with our insured institutional custodian, Gemini. Learn more about how ICCL stores client assets here.
Taking out a loan with ICCL can also have positive tax implications for you and your business. For example, our loans do not trigger any taxable events. Unlike selling or trading your crypto, there is no negative tax implication from our loans. Additionally, the interest paid on your loan can be deducted from your capital gains taxes.
Clients can go from application to funding in as few as 90 minutes. Apply for a ICCL loan today and get funding for your business using your cryptocurrency.