SBA lenders approved 469 7(a) loans to employment placement agencies (NAICS 561311) between October 2023 and June 2026, worth $184,921,300 from 105 lenders. The median loan was $150,000, level with the national $150,300, but the median rate was 10.75% against 10.25% nationally. Acquisitions were only 6.4% of loans, yet at a median of $1,122,000 they were far larger than the typical loan. Lenders focus on how steady placement fees are, how much of the business sits with a few recruiters or clients, and whether the firm also runs a temporary payroll.
| Measure | Employment Placement Agencies | All industries |
|---|---|---|
| SBA 7(a) loans approved | 469 | 162,355 |
| Median loan | $150,000 | $150,300 |
| Middle half of loans | $100,000 – $350,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 7.9% | 12.9% |
| Median rate at approval | 10.75% | 10.25% |
| Middle half of rates | 10% – 11.5% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 30 (6.4%) | 16,849 (10.4%) |
| Median acquisition loan | $1,122,000 | $693,000 |
| Lenders that made these loans | 105 | 1,648 |
| SBA 504 loans (real estate, equipment) | 8 | 16,714 |
Approvals FY2024 – FY2026 to date (1 Oct 2023 – 30 Jun 2026), cancelled loans excluded. Source: SBA 7(a) and 504 FOIA loan records, as of June 30, 2026.
- SBA 7(a) loans approved
- 469 (Oct 2023 – Jun 2026)
- Median loan
- $150,000 (national $150,300)
- Median rate at approval
- 10.75% (national 10.25%)
- Acquisitions
- 30 loans (6.4%), median $1,122,000
- Through SBA Express
- 38.4% of loans
- SBA 504
- 8 loans, median $1,575,500
What SBA lenders approved for placement firms
NAICS 561311 covers firms that fill permanent jobs for employers: contingency recruiters, retained executive search firms and agencies that list openings and refer candidates. A firm that puts its own workers on client assignments and runs their payroll is a temporary help service, with a code of its own (see SBA loans for temporary help services). Many businesses do both, and the line between the two matters to a lender, because a temporary payroll changes the risk of the whole file.
From FY2024 through June 2026, 105 lenders approved 469 7(a) loans to placement agencies, worth $184,921,300. The median business supported 6 jobs: recruiters, researchers and a coordinator or two.
| Figure | Placement agencies | National | What it suggests |
|---|---|---|---|
| Median loan | $150,000 | $150,300 | A typical-sized SBA borrower |
| Middle half of loans | $100,000 to $350,000 | Few very small loans; the bottom quarter starts at six figures | |
| 90th percentile | $784,560 | Acquisitions and larger firms | |
| Loans of $1 million or more | 37 (7.9%) | A real tail of large loans, mostly purchases | |
| Median rate | 10.75% (middle half 10% to 11.5%) | 10.25% | Priced above the national median at the same size |
| Fixed-rate share | 6.4% | Almost everything floats with the base rate | |
| Start-ups | 13.6% of loans | New firms are financed, usually by experienced recruiters | |
| Franchises | 10.4% of loans | Branded recruiting systems are a real minority | |
| Acquisitions | 30 loans (6.4%), median $1,122,000 at 9.5% | 10.4% | Fewer purchases, but large ones |
The rate is the figure to notice: the national median amount, at half a point more. Collateral is the likely reason. A placement firm has little a lender can take, so the loan is priced for a thin recovery, and 38.4% of loans went through SBA Express, where the lender carries more of the risk under a 50% guaranty. See SBA 7(a) vs SBA Express and SBA's maximum interest rates.
How placement revenue reads to a lender
A placement firm earns a fee when a candidate starts, commonly tied to the candidate's first-year pay. Each fee is large relative to monthly overhead, and each one is earned only once. That makes revenue lumpy, and a lender reading two or three years of returns will see it. The question is not whether a quarter was weak but whether the firm fills enough roles, for enough clients, to carry its payments through the weak quarters.
| Revenue model | How it arrives | What the lender asks |
|---|---|---|
| Contingency search | A fee only when a candidate is hired | Placements per recruiter, fill rates, and how many clients produce most fees |
| Retained search | Installments at engagement, shortlist and hire | Engagement pipeline, repeat clients, and what happens when a search fails |
| Contract-to-hire or temporary staff | Weekly billing for workers on the firm's payroll, plus conversion fees | Payroll funding, payroll tax filings, and how receivables are financed |
Guarantee periods. Most placement agreements promise a replacement or refund if the candidate leaves within an agreed period. A firm with a history of refunds has less revenue than its invoices say, and a careful lender will ask for it. A clean refund record, shown from the firm's own placement ledger, is persuasive.
Coverage. SBA requires debt service coverage of at least 1.15x, and 1.0x globally once the owners' personal debts and income are included. In a small firm the owner is often the top biller, and the lender will want to see a realistic salary for that role before measuring coverage. See debt service coverage ratio and global cash flow.
The recruiters are the collateral
A placement firm's assets walk out of the office every evening. Its hard collateral is computers, furniture and a lease; its value is the candidate database, the client relationships and the recruiters who hold both. SBA lenders do not decline a loan for lack of collateral alone, but they take what there is, including a lien on the owners' personal real estate where there is equity, and every owner of 20% or more personally guarantees the loan. See will an SBA loan take my house.
- Recruiter concentration. If two recruiters produce most of the fees, the lender's real question is whether they stay. Tenure, pay structure and any non-solicitation agreements (enforceability varies by state) all matter.
- Client concentration. A firm that fills most of its roles for one hospital system, one contractor or one technology company is exposed to that client's hiring freeze. See how customer concentration affects borrowing.
- Sector cycles. Permanent hiring slows early in a downturn. Lenders look at how the firm's fees held up in its weakest recent year.
A placement firm is underwritten on people who can leave. The file has to show why they have not.
Payroll, factoring and cash advances
The pure placement firm has no payroll float: it pays its own staff and waits for fees. The firm that also runs contract or temporary workers pays them weekly and waits for clients to pay invoices, and that gap is usually funded by factoring, a bank line or, too often, a merchant cash advance.
SBA will not refinance an active merchant cash advance or a factoring agreement. From 1 October 2026, an advance becomes eligible only once converted to a term loan that has amortized for at least 24 months with no new advance since. Refinancing other debt with a 7(a) loan requires the new payment to be at least 10% lower and the debt current for the last 12 months. Where receivables carry the business, an asset-based line may fit better than an SBA term loan; see lines of credit for staffing agencies, moving from factoring to a line and refinancing cash advances for staffing agencies.
Unpaid payroll taxes are the fastest way to end an SBA application. A lender will ask for the firm's quarterly payroll filings and confirm the deposits were made. See unpaid payroll taxes and refinancing.
Buying a placement firm
Only 30 loans, 6.4% of the total against 10.4% nationally, financed a change of ownership, but their median was $1,122,000, more than seven times the industry's median loan, at a median rate of 9.5%. Loans above $350,000 fall under SBA's lowest rate cap, the base rate plus 3%, which helps explain why the purchase loans priced below the industry's overall median. These are established firms with years of fee history changing hands, often to a senior recruiter or a buyer from outside the industry.
| SBA rule | Why it bites in a placement firm |
|---|---|
| Independent business valuation where the amount financed, less appraised real estate and equipment, exceeds $250,000 | Almost the whole price is goodwill, so nearly every purchase needs one, and the loan cannot exceed it |
| No earnout to the seller | Placement firms often sell on earnouts outside SBA; in an SBA deal the gap has to be bridged another way |
| Seller note counts toward equity only on full standby for the life of the loan | A standby note can cover up to half of the 10% equity injection; a paying note is debt in the coverage test |
| Seller may consult for up to 12 months (up to 24 months under SOP 50 10 8.1 from 1 October 2026), not stay as owner or employee | The transition of client relationships and recruiters has to happen in that window |
| From 1 October 2026: 1.25x coverage on historical results, and financial due diligence on every change of ownership | Lumpy fee years are tested as they happened, not as projected |
A quality of earnings report is required from 1 October 2026 on acquisitions of $3 million or more excluding real estate, which covers the larger firms in this market. See financing a staffing agency acquisition, SBA's valuation requirement and earnout vs seller note.
Preparing a placement firm's file
Start with SBA's standard list: business tax returns for 2–3 years, a P&L and balance sheet with a year-to-date P&L through last month-end, a debt schedule with copies of any notes being refinanced, and personal tax returns and a personal financial statement for each owner of 20% or more. For a placement firm, add:
- A placement ledger: client, role, fee, start date, and any refund or replacement under a guarantee
- Fees by client for each year, so concentration is visible at a glance
- Production by recruiter, with each recruiter's tenure and pay basis
- Standard client fee agreements, and any exclusive or retained agreements with major clients
- If the firm runs a temporary payroll: quarterly payroll tax filings, the receivables aging and the current factoring or line agreement
- The owner's resume, supporting Form 1919's management experience
Transparent builds the full lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day once the documents are in, and takes it to the 278 lenders in its book that write SBA 7(a) and 504. On SBA loans the lender pays Transparent, not the borrower. See the package and how we underwrite.
Common questions
- Can a recruiting firm get an SBA loan without hard collateral?
- Yes. SBA lenders do not decline a loan for lack of collateral alone. They take what the business has, may take a lien on the owners' personal real estate where there is equity, and require a personal guarantee from every owner of 20% or more. The loan is decided on cash flow.
- Why do placement agencies pay a higher SBA rate than average?
- The median rate was 10.75% against 10.25% nationally, at a median loan of the same size. A business with little collateral and lumpy revenue is priced for thinner recovery, and 38.4% of loans went through SBA Express, where the lender carries more of the risk.
- How big are SBA loans to buy a placement firm?
- The 30 acquisition loans from October 2023 to June 2026 had a median of $1,122,000 at a median rate of 9.5%. Almost the whole price is goodwill, so SBA's independent valuation applies and caps the loan.
- Can I start a recruiting firm with an SBA loan?
- Start-ups were 13.6% of loans in this industry. Lenders look for a recruiting track record, ideally with clients who will follow, at least 10% of total project costs as equity, and a realistic ramp before fees arrive.