Staff have to be paid on payday, whatever your customers do. It’s one of the hardest pressure points in running a business, and one of the most common reasons people ring the Hotline. The good news: a payroll gap caused by late payers is exactly the kind of problem short-term business funding is built for.
Why does this keep happening?
Because you pay out before you’re paid in. Wages go out weekly or fortnightly; customers pay on 20th-of-the-month terms, or 30 days, or “when the head contractor pays us”. Xero’s Small Business Insights data for the June 2026 quarter showed New Zealand small businesses waiting around 24 days on average to be paid, and still being paid late on average. In construction and trades, where retentions and progress claims stretch things further, the gap is often wider.
What are the funding options?
A business line of credit. An approved limit you draw on before payday and repay when the invoices land. You typically pay only on what you use, for as long as you use it. Ideal when the gap repeats most months. Our answer on whether you need a line of credit explains it in full.
A short-term unsecured loan. A lump sum to get through a specific crunch — a big job finished, a large invoice outstanding, a slow month. Sized to your turnover and bank statements; usually for businesses trading 6+ months, with decisions sometimes same day.
A property-secured loan. If the gap is large, or it’s tangled up with tax arrears and other debts, equity in New Zealand property can fund $20,000 to $1m and clear several problems at once. No financials needed for the initial assessment.
Don’t forget the PAYE
Payroll isn’t just the net wages. It’s also the PAYE, KiwiSaver employer contributions, ESCT and any child support or student loan deductions you’ve withheld. Under payday filing, employment information is filed each payday, and deductions are paid monthly by the 20th of the following month for most small and medium employers (large employers pay twice a month).
Employer deductions are treated seriously by Inland Revenue and carry heavier penalty rules than most other taxes. Those amounts are your employees’ money held in trust. If you have to choose, funding the gap is usually far cheaper than falling behind on PAYE. Our guide to paying staff and PAYE when cash is tight sets out the dates and obligations.
How do I get paid faster?
Funding bridges the gap; collections shrink it. A few changes that genuinely work:
- Invoice the same day the work is done, not at month-end.
- Shorten terms for new customers — 7 or 14 days rather than 20th of the month.
- Make paying easy. A pay-now link or card option on the invoice gets paid faster than bank details alone.
- Take deposits and progress payments on larger jobs.
- Chase on day one. A polite, automatic reminder the day after the due date works better than a frustrated call three weeks later.
- Know who pays slowly. Look at your debtor report and price or term slow payers accordingly.
When is funding the wrong answer?
If payroll is short because the business is losing money — not because of timing — more debt only delays the reckoning. Signs to watch: the gap is growing each month, you’re funding the last loan’s repayments with the next one, or you’ve stopped paying tax to pay wages. In that case, talk to your accountant first and look at the underlying numbers. A specialist on the Hotline will tell you honestly if we think that’s where you are.
How fast can it happen?
When bank statements are ready and the business is straightforward, unsecured decisions are sometimes same day. Property-secured loans can in some cases be funded within 24 hours of approval. Call early — Monday for a Thursday pay run is far easier than Wednesday afternoon.
Next step
Ring the Hotline with your pay-run total, the invoices outstanding and your payday. A specialist will tell you the quickest realistic option. Or request a call back.