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Small businesses form the backbone of the United States economy. Every year, thousands of entrepreneurs across the United States open a small business. Unfortunately, it can be difficult for many small businesses to effective generate enough capital for success, at least at the beginning. The following guide explores how small business loans can help employees reduce stress.
Small business loans can be guaranteed by either the federal government or private lenders. In most cases, federal small business loans offer lower interest rates than private loans. However, it can be difficult for many small businesses to qualify for these types of loans. Private loans often have higher interest rates, but more businesses can qualify for these types of loans.
Small business loans can be used to expand a business or cover everyday expenses, such as payroll. For new businesses, it can be difficult to manage all the initial costs associated with a startup. On average, payroll is one of the most expensive parts of operating a new business.
Payroll comprises 40 percent of the total operating costs of a small business. Since it can be difficult to build a quality roster of good employees, it’s important to make sure that employees are always paid on time. If an employee is worried or concerned about their compensation, they may not be willing to give their best to a job.
A single late payroll payment from an employer to an employee can cause significant issues in terms of employee morale. When an employer doesn’t process payroll on time, that employee may not be able to pay all their bills when they need to be paid. In some cases, employees may even begin to look for another job.
For example, the United States government shutdown of 2019 caused a significant number of issues for many federal employees. Across the United States, approximately 800,000 people didn’t receive their paycheck on time. Many federal workers were still required to go to work, but the number of employees calling in sick increased significantly during this time. At airports, TSA workers and air traffic controllers were required to go to work, regardless of whether they were receiving their paycheck. As a result of this situation, worker morale began to decrease significantly. Wait times at many major airports increased, which led to a number of delayed flights. Eventually, the flight delays grew to be such a huge problem that lawmakers were forced to reopen the government immediately.
While everyone in the situation above received back pay, it did cause significant problems for federal workers who made less money. For federal workers who lived paycheck to paycheck, even a single missed paycheck was catastrophic. In many situations, federal workers ended up calling in sick so they could moonlight at another job that would be able to pay.
The same principles hold true for a small business too. If you aren’t able to pay your employees when they expect to be paid, you can’t expect them to perform well. Everyone needs to eat, and everyone needs to pay their bills. If you aren’t able to fulfill your end of the bargain as an employer, it can be difficult to retain employees.
With a small business loan, you can reduce this stress on your employees. In the event that a small business is going through a challenging period, a loan can help ensure that employees receive their payment as scheduled.
It’s important to remember that employees are the most important part of a business. If employees aren’t treated with the respect and dignity they deserve, they won’t be willing to give their best to the job.

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