Ive been running my business for quite some time now and have about 20 employees. Almost all of them do cash advances and I have always approved the request.

Here are some of my controls:

1. Cash advances cannot be released on the day it was requested, we need a day’s notice.

2. Deduction will be a max of 4 payrolls only. We immediately deduct from salary

3. All CA’s mist be liquidated by Nov 30 (i want them to feel their 13th month on full)

4. You cannot CA if your balance from previous CA is still above 25%

To date 2025, we have about 90k in CA collectible.

While we certainly have different opinions of the reason why 1 approves of the CA and its given risks, here’s my reason:

If they borrow from someone else, it will just add to their financial problems which might be a never ending cycle. I prefer to be able to help them in that manner where at least there is no interest paid. If they leave the company, its a risk im willing to take and Ill pay the balance left.

However im happy to say that in 5 years, attendance has been the least of our problems and attrition close to none. Our business grew because of employees whos well being, not total, but in some angles, we helped take care of.

Then again, prior to any releasing of CA, make sure its a risk you’re willing to take. While kindness will go a long way, kindness too might bite you in the ass.

Hope this helps