Crestmark Featured in 'The Secured Lender' Magazine

by Crestmark 2. June 2014 12:39

Asset-based lending and staffing agencies make good business partners. It's something that we've known at Crestmark for quite some time. The Commercial Finance Association's "The Secured Lender" magazine recently featured Crestmark's West Division President, Pat Haney, and East Division President, Steve Tomasello, in an in-depth look at how and why staffing agencies and asset-based lending companies are a good fit for each other. 

In short, the article "Perfect Partners" explains how asset-based lending companies like Crestmark are able to understand, work with and scale to the long-term needs of clients like staffing agencies that are in a position to grow quickly. While their financial outlooks are promising, staffing agencies have needs that can't be met by traditional lenders and standard bank loans. 

crestmark in secured lender

"Staffing's only going to grow. It's the second-largest segment in our portfolio, and we only see that continuing in the future," Tomasello explained in the article.

In select industries, companies are hiring workers, but only on a temporary basis at the moment. That means they need the flexibility of staffing agencies that can handle the recruiting and screening process until this growth becomes more permanent. Staffing agencies don't always meet the requirements of traditional lenders, making asset-based lenders ideal partners for meeting the rapidly rising costs of financing payroll, insurance, taxes and other related expenses.  

"Strong cash flow is imperative for the staffing industry," said Haney. "Without it, they may get so far behind on tax payments that they go out of business."

Both the staffing agency and the lender need to understand how the other company works, especially when it comes to the lag time between when the employee is paid by the agency and when the agency is paid by its client company.

As with all successful relationships, communication, patience and flexibility are key factors in making the partnership beneficial to both the lender and the borrower.

Want to see the full article in "The Secured Lender" magazine? Read "Perfect Partners" here.


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Financing The Staffing Industry

by Crestmark 19. July 2012 12:03

The staffing industry has some of the most unique working capital needs of any industry. The reason is simple: it provides a very unique product, and truly obtains very little trade credit support. This creates financial situations that rarely arise in other industries. Working with a finance company that knows how your business operates and specializes in staffing financing is important to get the best funding for your company.

The first challenge faced by staffing companies is high payroll that can vary drastically. Because you provide staffing solutions for so many companies, your workforce has to be larger than a similarly sized company in another industry. A larger payroll makes working capital needs more intense because you're required to pay each week yet your customers may take several weeks to pay you. There is no product buffer in staffing; you need to make sure everyone gets paid every week, and sometimes that means payroll funding or staffing financing is a necessity

In addition, the industry is inherently variable. The staffing industry has to adjust based upon the needs of the industries it serves. For instance, in the medical field, payroll needs and margins can vary dramatically between doctors, nurses and aides. During high growth periods the need for cash intensifies but when sales volume decreases you may become more liquid. You can help bridge the gaps in your finances left during sudden fluctuations by seeking out staffing financing tailored to your unique working capital needs.

Crestmark is proud to provide the kind of specialized financing and knowledge that staffing companies need. We maintain an entire division devoted to serving staffing companies, providing the kind of lending solutions and payroll funding that suit the industry's unique business climate. 

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