The Five Keys to Obtaining a Staffing Company Loan

It’s not always easy to get a staffing company loan from a bank or from any other lending institution. It takes a lot of time to process, and your chances of actually getting a loan may not be as high as you’ve hoped. But it’s very common to need more staffing agency funding especially when your company grows and acquires more clients, so you may need to either persist in getting a loan or try to get funding from factoring companies instead.

So if you’re determined to get a loan, here are some of the considerations to which you need to pay particular attention:

Character

Who are you and why should a lender lend you money? When you apply for a loan from a bank, you need to convince them that you have the character and the skill to pay back what you borrow.

That starts with looking professional, and you need to prove it in other ways as well. You have to provide records and proof about your educational attainment and work history. Your personal credit must be outstanding, and it will really help if you have excellent references from the people with whom you’ve done business in the past.

Business Conditions

You’re going to need a business plan, as well as any formal analyses you have regarding your industry. Your bank will want to know how you view the trends in your particular industry, whether you’re providing personnel for IT, for security guards, or for janitors.

You’re also going to have to explain how you plan to use the loan, and how you plan to repay the money in light of current economic conditions in your industry and your area.

Finances

A potential lender will also take a very close look at your financial state. Just how much in assets do you own, and how much debt do you carry? What are your current expenses, sales, and profit margins? How is the state of your company’s cash flow? Do you always pay your bills on time?

Aside from looking for evidence that you have the means to pay back the loan, the bank will also want to know your personal investment in the company. For example, if you’re just starting a staffing agency, the bank would feel better if you already have some money stored away to use, and you’re asking for a loan to add to that money. It shows that you’re seriously committed to your business. Banks, however, may not lend you money if you didn’t even bother saving some money to help fund your business.

Collateral

This is often a problem for staffing agencies, since your company doesn’t usually have much in terms of assets and expensive equipment. You may have to offer a personal guarantee for the loan. Usually, you will have to put your own personal assets up as security. So if you have full ownership of your home, you will usually have to offer that as collateral..

With all these things to consider, it’s easy to see why factoring has become so popular! But if you look good in all these areas, then you stand a very good chance of getting that staffing company loan you need.

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Chris Lanchech

Hi everyone, my name is Chris and I am a junior analyst at Neebo Capital and an inspiring blogger. We enjoy speaking with business owners and entrepreneurs who come to Neebo Capital looking for cash flow solutions.

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