Payroll is Friday. Your customers owe you ₦5M. Now what?

Busy month on paper, tight week in the bank. Nigerian founders bridge the gap with discipline first — and the right kind of short-term facility when the numbers support it.

  • Open invoices are not cash — plan payroll and rent from what landed, not what you sent.
  • Invoice advance fits money already owed on sent invoices; working capital fits payroll-week gaps when the business still earns.
  • Chase receivables, trim discretionary spend, and only borrow when you can name the repayment date.

Ruona runs a facilities company in VI. June was a good month for sales — two corporate contracts renewed, a new retainer signed. Her Trade list shows ₦5.2M still open on sent invoices. Her bank app shows ₦680,000. Payroll on Friday is ₦1.4M. A vendor she cannot stall is asking for ₦900,000 by Thursday. Nobody is refusing to pay. They are just paying on their timeline, which is not hers.

The business is not broke. The timing is.

₦5M “out there” and ₦680k in the bank are both real — only one pays diesel.

Before you borrow anything

Short-term credit is a bridge, not a salary. If you skip these steps and go straight to “who can send me money,” you will borrow against a problem you have not diagnosed.

  1. Call the three largest debtors — not a broadcast WhatsApp, an accounts person by name
  2. List what must leave the account this week (payroll, rent, statutory, non-negotiable vendors)
  3. Cut what can slip seven days without killing the job
  4. Only then ask whether you need a facility — and for how much, until when

Invoice advance vs working capital

People use these terms interchangeably. They are not the same product — and picking the wrong one is how you end up with a repayment you cannot meet.

Invoice advance (factoring your own receivables)

You have specific invoices — sent, maybe partially paid — from customers who are slow but not deadbeats. You pledge those invoices and receive a portion of what they owe now, then repay when they pay you. The ceiling is tied to real AR, not wishful thinking.

  • Best when: you can name the invoice numbers and the customers
  • Amount: often capped as a percentage of what those invoices still owe
  • Repayment: naturally lines up when the customer settles
  • Wrong fit: no proper invoices, only “they promised” on chat

Working capital line

This is for the operating week — payroll, stock, fuel, a bridge until revenue lands. Underwriting looks at how the whole business breathes: runway, recent profit, whether payroll is covered by cash, how fast customers pay on average.

  • Best when: the business earns but cash arrives in lumps
  • Amount: scaled to revenue and health, not a random round number
  • Repayment: fixed date — you need a plan before you draw
  • Wrong fit: chronic loss-making with no collection process

Runway and inflows — not just “how much do I need today?”

What a serious underwriter checks (including us)

Any lender worth using looks at data, not your pitch deck. Business Buddy pulls signals from your live Money, Trade, Books, and Payroll data — not a form you filled at midnight.

  • Days of cash — how long current balance lasts at recent spend
  • Outstanding receivables and how long customers take to pay (DSO)
  • Whether last payroll was covered without you topping up personally
  • Concentration — one customer as most of your paid revenue is risk
  • Burn direction — is spend climbing faster than usual this month?

You get a score and an explanation of what helped or hurt. That is useful even if you do not take the facility — it tells you what to fix before next month.

Pricing you should understand

A flat “5% fee” on a 30-day bridge is not the same as 24% APR pro-rated for the days you actually use. Read the term, the annual rate, and the total due at maturity. ₦500,000 for 30 days at transparent term pricing is a number you can put in a spreadsheet. “Small admin fee” without a date is not.

A week Ruona could actually run

  1. Monday: confirm which invoices will pay this week; send reminders on the rest
  2. Tuesday: payroll draft approved; check Financing signal for pre-qualified limit
  3. Wednesday: if bridging, pledge specific sent invoices — not a vague “we are owed”
  4. Thursday: vendor partial if needed; full pay only when cash lands
  5. Friday: payroll out; log every repayment against the facility the same day

Money and Trade in one place — so the bridge has a start and end date.

When to say no

Decline the facility — or do not apply — if customers are disputing invoices, you do not know this month’s payroll total, or you are borrowing to cover last month’s leak with no plan to fix the leak. Credit multiplies discipline. It does not replace it.

See your financing signal — Server-derived limits · invoice pledge · KYC before draw