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Staffing Payroll Funding: Lending For Temp Staffing Agencies

Loans For Staffing Companies

Staffing companies may represent just be 2% of the U.S. workforce, they are a crucial part of the U.S. economy. The staffing industry statistics show has about 17,000 recruitment and staffing companies with over 35,000 offices. These staffing businesses employ over 3 million temporary workers weekly, and 14 million Americans each year and offer both temporary and full-time career opportunities (with half of staffing employees saying in recent polls that temporary employment is a way for them to get a permanent job. If current trends hold, steady staffing growth will continue, and the industry will fast outpace the overall economy in growth, as it has in both 2014 and 2014, when the staffing industry outpaced the U.S. economy by 2.5 times, and 3 times, respectively.

Staffing and temporary employees are heavily-involved in nearly every sector of the U.S economy including:

  • 37% Industrial
  • 28% Office
  • 13% Professional and Management
  • 13% Engineering and IT
  • 9% Health Care industry

What are the options to finance a staffing company?

Some of the options to finance a temporary staffing business include:

  • AR financing
  • Factoring
  • Conventional bank loans
  • Traditional bank lines of credit
  • SBA loans
  • Mid prime alternative loans
  • Sub prime business funding
  • Merchant cash advances

What are the Uses for Staffing Business Loans?

Uses for staffing business loans, invoice financing and factoring include:

  • Working capital
  • Expansion
  • Payroll
  • Advertising
  • Pay suppliers
  • Hire employees
  • Pay taxes or other liabilities

AR Financing for Staffing Companies

AR financing (also called accounts receivable factoring and invoice financing) is a way for a staffing company or businesses that offer temporary work to use their unpaid accounts receivable as collateral to receive financing. An AR financing company will usually forward a percentage (up to 90%) of an unpaid invoice, and when the remaining balance is paid by the company you invoiced, the factoring company will then release the remaining balance (minus a fee).

  • Discount Rates: 0.1 – 10%
  • Fees: 0 – 3%

Conventional Loans For Staffing Companies

Conventional terms loans from large, small and community banks offer staffing companies with access for capital needed to run their operations, with some of the best rates available. On top of having the best rates, conventional business loans and lines of credit offer staffing companies with extended terms which allows staffing companies to have the maximum amount of cash on hand to pay for expenses like payroll funding and hiring employees.

  • Rates: 5-10%
  • Terms: 1-10 years

Staffing SBA Loans

SBA loans for staffing companies allow companies that have borderline bank-rate credit and cash-flow to obtain bank-rate financing with the aid of an SBA enhancement. The SBA encourages banks to lend to small businesses by agreeing to cover up to 90% of the lenders’ losses if the staffing company should default on their loan. In return for the SBA-enhancement, the lender if prohibited from raising rates above SBA limits (usually between 5-8% depending upon SBA program).

  • Rates: 5 – 8%
  • Terms: 1 – 7 years

Staffing Alternative Loans

Alternative business loans are a way for staffing businesses to obtain funding for their company without having to go through the hassles associated with a bank loan. Instead of providing lots of business financial documents, and staffing business is able to able funding with just submitting an application, bank statements and tax returns. With a limited amount of documentation required, a company can get funded by an alternative loan in the matter of days.

  • Rates: 7.99% – 25%
  • Terms: 1 – 5 years

Staffing Agency Cash Advances

Business cash advances allow staffing companies to obtain fast funding for payroll by selling their future bank deposits in return for immediate cash. The cash advance company will provide up to 150% of a staffing company’s monthly bank deposit amount and the company will agree to pay back that amount and up to 50% more through daily and monthly repayments.

  • Factor rates: 1.15 – 1.55
  • Terms: 3 – 24 months

Get a Staffing Agency Loan

Who We Are

GUD Capital is a nationally recognized leader in the financing industry for providing the best business lending solutions available to small and mid-sized businesses. We leverage our network of 4,000 competing commercial lenders to provide your business the largest selection of commercial financing options.

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