It has become harder than ever for staffing firms to be effective in today’s business landscape, especially since employee candidates now have a great many online options by which they can pursue their own job opportunities. With the degree of difficulty becoming much greater, more staffing agencies are requiring an infusion of cash to upgrade their services, and to remain competitive.
Here are some of the ways working capital can be used to help staffing agencies.
Staffing companies seeking the best rates on their long-term loans and working capital will probably find the most opportune deals with conventional banks. Many staffing agencies use term loans from banks to grow their businesses, to purchase additional real estate, for meeting their payroll requirements, or for marketing and advertising needs.
Secured and unsecured lines of credit
Sometimes working capital is very necessary for staffing agencies so they can meet their payroll requirements, and to hire additional staff members. These are the kinds of financial needs which have to be addressed promptly, rather than by a bank loan which might take weeks or months to arrange for. With a secured line of credit or an unsecured line of credit, a staffing company would have access to the kind of working capital it needs at any time, without having to arrange for any special kind of loan.
Of course, any staffing agency would prefer an unsecured line of credit which requires no collateral, but these are only made available to companies with stellar credit history, and those with a many years of experience in the business. A secured line of credit is still worthwhile, even though it has to be arranged with some kind of business asset as collateral.
Many small businesses such as staffing agencies, are eligible for a loan from the Small Business Administration. Although the SBA does not itself provide any funding, it guarantees a portion of any loan extended by a conventional bank, thereby making it much more likely that the applicant would be approved for the loan. SBA loans must be used for a few specific purposes, primarily to grow the business, or to meet operational needs.
Does your business need working capital?
Sometimes the lack of working capital is the one thing holding your business back from being able to advance to the next level. Contact us at Avery James to learn about some options by which we could provide you with the working capital you need for real growth.