SBA lenders approved 119 7(a) loans to temporary help services (NAICS 561320) between October 2023 and June 2026, worth $66,975,700 from 51 lenders. The median loan was $200,000 against $150,300 nationally, at a median rate of 10.5% (national 10.25%), and only 9.2% of loans were fixed-rate. Acquisitions were 10.1% of loans at a median of $1,215,000. Lenders focus on how payroll is funded, whether payroll taxes are current, workers' compensation, gross margin and client concentration.
| Measure | Temporary Help Services | All industries |
|---|---|---|
| SBA 7(a) loans approved | 119 | 162,355 |
| Median loan | $200,000 | $150,300 |
| Middle half of loans | $84,350 – $500,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 16% | 12.9% |
| Median rate at approval | 10.5% | 10.25% |
| Middle half of rates | 9.75% – 11.5% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 12 (10.1%) | 16,849 (10.4%) |
| Median acquisition loan | $1,215,000 | $693,000 |
| Lenders that made these loans | 51 | 1,648 |
| SBA 504 loans (real estate, equipment) | 3 | 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
- 119 from 51 lenders (Oct 2023 – Jun 2026)
- Median loan
- $200,000 (national $150,300)
- Median rate at approval
- 10.5% (national 10.25%)
- Acquisitions
- 12 loans (10.1%), median $1,215,000 at 9.88%
- Loans of $1 million or more
- 19 (16%)
- Median jobs supported
- 10
What the SBA figures say about temporary staffing
NAICS 561320 covers firms that put their own employees on assignment at client businesses and bill the client for the hours: light industrial and warehouse staffing, clerical and administrative temps, and specialized staffing in fields such as healthcare, accounting or IT. The staffing firm is the employer of record, runs the payroll and pays the payroll taxes. A firm that only recruits for permanent roles and earns a placement fee is an employment placement agency, with its own figures on SBA loans for employment placement agencies.
| Figure | Temporary help services | National | Reading |
|---|---|---|---|
| Median loan | $200,000 | $150,300 | Above the typical SBA loan |
| Middle half of loans | $84,350 to $500,000 | Working capital up to mid-size buyouts | |
| 90th percentile | $1,794,000 | Acquisitions of established firms | |
| Loans of $1 million or more | 19 (16%) | A substantial tail | |
| Median rate | 10.5% (middle half 9.75% to 11.5%) | 10.25% | A little above national |
| Fixed-rate share | 9.2% | Nearly everything floats | |
| SBA Express | 42.9% of loans | Smaller working-capital loans and lines | |
| Start-ups | 6.7% of loans | A small share; lenders want staffing experience first | |
| Franchises | 5% of loans | Branded staffing systems are a small minority | |
| Acquisitions | 12 loans (10.1%), median $1,215,000 at 9.88% | 10.4% | Typical share, unusually large deals |
| SBA 504 | 3 loans, median $532,000 | Little real estate in this business |
Two figures describe the business. The median business supported 10 jobs, but the payroll a lender cares about is wider than the internal team of recruiters and account managers: every worker on assignment is on the firm's payroll too. And only 3 loans went through SBA 504: staffing firms rent offices and own little else, so the loan is underwritten on cash flow and receivables, not buildings.
The payroll gap, and why it decides the file
A staffing firm pays workers weekly. Clients pay invoices on their own terms, often a month or more, and longer for some large companies and public agencies. Every new client, and every new worker placed, widens the gap. Growth consumes cash, which is why a fast-growing staffing firm can be profitable and short of money at the same time.
There are three common ways to fund that gap, and each looks different to an SBA lender:
| How payroll is funded | How it works | What an SBA lender does with it |
|---|---|---|
| Factoring | A factor buys invoices and advances most of their value, often with notification to clients | SBA will not refinance a factoring agreement; the SBA loan has to fit around it or follow its replacement |
| Asset-based line | A lender advances against eligible receivables under a borrowing base | The line and the 7(a) loan work side by side, with an intercreditor arrangement |
| Cash advances | Daily or weekly remittances against future receipts | SBA will not refinance an active merchant cash advance; 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 |
| Own cash | The firm carries payroll from retained earnings | Strongest position, and usually only possible at a smaller size |
Many firms start on factoring and outgrow it. A move to an asset-based line or an SBA CAPLine usually lowers the cost of funding payroll. Asset-based lenders typically advance 80% to 90% of eligible receivables, exclude invoices more than 90 days past invoice, and commonly cap any single client at 20% to 25% of eligible receivables. See moving from factoring to a line of credit, factoring vs asset-based lending and lines of credit for staffing agencies. A firm carrying cash advances has a separate path, set out in refinancing cash advances for staffing agencies.
Settle how payroll will be funded before applying for the SBA loan. A lender cannot approve the term debt without knowing what sits beside it.
Payroll taxes, workers' comp and margin
Payroll taxes. A staffing firm collects and remits payroll taxes on every worker it places, so tax deposits are a large, constant liability. Lenders check early for unpaid payroll taxes and federal tax liens, and an open delinquency generally has to be resolved before an SBA loan can close. See unpaid payroll taxes and refinancing and federal tax liens.
Workers' compensation. Light-industrial staffing carries real injury risk, and workers' comp premiums, deposits or collateral for a program can be a large cash commitment. Lenders ask how coverage is provided, what the claims history looks like, and whether any collateral is pledged to an insurer.
Gross margin. The firm earns the spread between what it bills and what the worker costs, including payroll taxes, workers' comp and benefits. A worked example: a bill rate of 100 an hour against pay of 70 and burden of 12 leaves 18 of gross profit to cover recruiters, offices, bad debt and debt service. A lender reads that spread by client and by line of business, because a big client at a thin spread can add revenue and risk without adding much profit.
Client concentration. One manufacturer or distribution center can supply most of a light-industrial firm's hours, and a plant closure or a switch to another agency ends it. Lenders want three years of revenue and gross profit by client, and the terms of any master service agreement with the largest. See customer concentration.
Buying a staffing firm with an SBA loan
The 12 acquisitions in the data, at a median of $1,215,000 and a median rate of 9.88%, were about six times the industry's median loan. A staffing acquisition is mostly goodwill: client relationships, a bench of workers and the recruiters who keep it filled. The purchase almost always needs an independent business valuation, required where the amount financed, less appraised real estate and equipment, exceeds $250,000, and the loan for the purchase cannot exceed it.
- Working capital at close. The buyer inherits a weekly payroll on day one. The price should assume a normal level of receivables, and the financing has to fund payroll from the first week; see working capital at close.
- Equity. At least 10% of total project costs, with a seller note counting toward up to half only on full standby for the life of the SBA loan.
- No earnout. SBA prohibits an earnout to the seller, so the price cannot be tied to clients staying. Buyers protect themselves through diligence on client tenure and contracts, and a price that reflects the concentration they find.
- The seller's role. The seller may consult for up to 12 months after a complete change of ownership (up to 24 months under SOP 50 10 8.1 from 1 October 2026), but may not remain as an owner, officer or employee.
- Coverage and diligence. SBA requires at least 1.15x today; from 1 October 2026 a change of ownership must show 1.25x on historical results, with financial due diligence on every change of ownership and a quality of earnings report on acquisitions of $3 million or more excluding real estate.
More in financing a staffing agency acquisition and quality of earnings for acquisition loans.
Preparing a staffing firm's file
Bring SBA's core documents: two to three years of business tax returns, a P&L and balance sheet, a year-to-date P&L through last month-end, a debt schedule with copies of notes being refinanced, and personal tax returns and a personal financial statement for each owner of 20% or more, each of whom guarantees the loan. A staffing file also needs an accounts receivable aging by client, revenue and gross profit by client, the current factoring or line agreement, evidence that payroll tax deposits are current, and the workers' compensation arrangement. For an acquisition, add the target's latest full year of figures and the letter of intent.
Transparent's lender book holds 1,800+ lenders, including 278 that write SBA 7(a) and 504, 235 that write asset-based lending and lines, and 116 that write factoring, so the term loan and the payroll facility can be placed together. Transparent builds the full lender package in a day once the documents are in, and on SBA loans the lender pays Transparent, not the borrower. See the package and SBA loan rates.
Common questions
- How large are SBA loans to temporary staffing firms?
- The median 7(a) loan from October 2023 to June 2026 was $200,000, with the middle half between $84,350 and $500,000. 19 of 119 loans were $1 million or more.
- Can an SBA loan pay off my factoring company?
- SBA will not refinance a factoring agreement. The usual path is to replace factoring with an asset-based line or an SBA CAPLine, and use the 7(a) loan for the long-term need alongside it.
- Will unpaid payroll taxes stop an SBA loan?
- Usually, until they are dealt with. Lenders check for payroll tax delinquencies and federal tax liens early, and an open delinquency generally has to be resolved before closing.
- Can I buy a staffing agency with an SBA loan?
- Yes. Acquisitions were 10.1% of 7(a) loans in this industry, at a median of $1,215,000. Plan for a business valuation, at least 10% equity, no earnout, and financing for the payroll you take on at closing.
- What do lenders look at first in a staffing firm?
- How payroll is funded, whether payroll taxes are current, gross margin by client, and how much of the business depends on its largest clients.