Generate Legal Paystubs & Get Approved for Loans

Table of Contents

1. Introduction
2. Why Pay Stubs are Important
3. Difficulties Faced by Small Business Owners
4. Leveraging Credit for Business Growth
5. Types of Businesses Eligible for Payroll
6. Choosing the Right Payroll Provider
7. Creating Pay Stubs with ADP
8. Integrating Zill Money with ADP
9. Running Payroll with a Credit Card
10. Understanding the Fees Involved
11. Benefits of Running Payroll with a Credit Card
12. Conclusion

Introduction

In this article, we will explore how small business owners can create their own pay stubs using a credit card. This step-by-step guide is a game-changer for self-employed individuals, small business owners, and freelancers. Proof of income is crucial when applying for loans, mortgages, or renting an apartment, and creating pay stubs can make the process much easier. We will break down the necessary steps and provide valuable insights on leveraging credit to scale your business. Whether you need lending or want to free up cash expenses, this article has got you covered.

Why Pay Stubs are Important

Pay stubs serve as a report card for your earnings, showcasing how much money you make, the frequency of your payments, and deductions made for taxes. Lenders, landlords, and other entities often require pay stubs as proof of income, ensuring that you have a stable and consistent source of funds. However, small business owners face challenges when it comes to obtaining lending, as they are often labeled as high risks. Most lenders require at least two years of tax returns before considering lending to business owners. In contrast, individuals employed as W-2 employees typically only need a few pay stubs to validate their income.

Difficulties Faced by Small Business Owners

Small business owners often struggle to secure lending due to the perception of being high-risk borrowers. Banks and lenders are cautious about providing loans to new businesses or those without a substantial financial history. Additionally, business owners may experience cash flow problems that hinder their ability to cover expenses such as payroll. While transferring funds from a business bank account to a personal account is a common practice, banks and lenders do not view this as consistent and stable income. To overcome these difficulties, small business owners need to act like big companies and run payroll.

Leveraging Credit for Business Growth

One significant advantage of running payroll is the ability to leverage credit to scale your business. For example, if you run a construction business and need mission-critical supplies, but your suppliers don't accept credit cards and only accept checks or wire transfers, you may face a cash flow problem. Using a credit card to pay for payroll expenses can free up cash for necessary business expenses, ensuring smooth operations. Moreover, using credit cards strategically can help you take advantage of discounts or bulk purchases, ultimately leading to cost savings.

Types of Businesses Eligible for Payroll

To implement this strategy, your business must be classified as a corporation or have a limited liability company (LLC) structure that is taxed as a corporation. Sole proprietors and single-member LLCs cannot run payroll for themselves. Before proceeding, it is essential to consult with your accountant or tax planner to determine the most suitable business entity for your specific situation. This decision should be based on financial considerations and the potential benefits associated with each type.

Choosing the Right Payroll Provider

To run payroll and create pay stubs, you need to partner with a payroll provider. ADP is one of the most prominent and trusted payroll providers in the industry. They offer printed and electronic pay stubs, which are preferred by many lenders and rental companies due to the difficulty in falsifying these records. By partnering with third-party providers like Plastic and Zill Money, ADP allows you to run payroll using a credit card. While Plastic's availability may vary due to bankruptcy, we will focus on Zill Money as an alternative option.

Creating Pay Stubs with ADP

To create your own pay stubs, you need to have a registered account with ADP. By signing up through the provided link, you can receive a special rate and access their white glove service. Once your ADP account is up and running, you can integrate Zill Money into your ADP account by subscribing to the Zill Money app through the ADP Marketplace. This integration will enable you to use a credit card to run payroll.

Integrating Zill Money with ADP

Upon subscription to the Zill Money app, you will be redirected to Zill Money's website, where you can sign up using your ADP credentials. After completing the integration, you can run payroll as usual. It is essential to provide your credit card and account details for a seamless payment process. Zill Money allows the use of American Express, providing more flexibility compared to Plastic, which only accepts Visa and Mastercard.

Running Payroll with a Credit Card

While running payroll with a credit card is convenient, it is not a free service. Zill Money charges a fee of 2.95%, which can be offset by utilizing cash back rewards and tax benefits. For instance, if your business credit card offers 1.5% cash back and your tax rate is 20%, the actual fee paid could be as low as 0.85%. Considering the benefits of increased lending opportunities and improved cash flow, this fee is relatively insignificant.

Understanding the Fees Involved

It is crucial to accurately calculate the fees associated with running payroll with a credit card. By considering cash back rewards and tax write-offs, the actual cost can be significantly lower than the initial fee mentioned. Proper evaluation of your business credit card's rewards program and tax implications can help you make an informed decision and maximize the benefits of running payroll with a credit card.

Benefits of Running Payroll with a Credit Card

Running payroll with a credit card offers several benefits. From a lender's perspective, seeing consistent income with pay stubs directly deposited into your bank account increases your credibility and likelihood of receiving financial assistance. This option allows you to appear more professional and financially stable. Moreover, using a credit card for payroll expenses frees up cash for other necessary expenses and can help alleviate cash flow problems. By utilizing credit strategically, you can scale your business faster and take advantage of growth opportunities.

Conclusion

Creating pay stubs with a credit card is a valuable tool for small business owners, self-employed individuals, and freelancers. It offers a solution to the challenges faced when seeking lending and provides opportunities for business growth. Leveraging credit to pay for payroll expenses not only improves cash flow but also enhances your professional image in the eyes of lenders and other stakeholders. By following the step-by-step guide outlined in this article, you can confidently create your own pay stubs and unlock the benefits of running payroll with a credit card.

Highlights:

• Learn how to create pay stubs using a credit card step by step
• Understand the importance of pay stubs for small business owners
• Overcome difficulties in securing lending
• Leverage credit to scale your business
• Determine eligibility for payroll and choose the right provider
• Run payroll using ADP and integrate Zill Money
• Calculate the fees and benefits of running payroll with a credit card

FAQ

Q: Can I use this method if I am a sole proprietor or have a single-member LLC? A: No, this method is only applicable to corporations or LLCs taxed as corporations.

Q: Is Zill Money a trustworthy platform for processing payroll? A: Yes, Zill Money is a reputable payroll provider that has partnered with ADP to offer seamless credit card payment options.

Q: Are there any other payroll providers I can use besides ADP? A: While ADP is one of the largest payroll providers, there are alternatives available. However, to create pay stubs with a credit card, you will need to work with a provider that offers this feature, such as Zill Money.

Q: Can I use a business credit card to pay for payroll expenses even if my business is new? A: Yes, as long as you have a business credit card, you can use it to cover payroll expenses. This can help you free up cash for other necessary expenses and improve cash flow.

Q: Are there any additional benefits of running payroll with a credit card? A: Yes, running payroll with a credit card can make your business appear more legitimate and financially stable in the eyes of lenders. It also offers convenience and flexibility in managing cash flow and expenses.