of even more significance is the ability of
ABLs to prepare for what’s going to happen in the future of their staffing agency
clients and to find other ways to help.
Crestmark Bank, for example, was able
to help one large customer expand their
business because it financed much more
than just the receivables. A particular
company demonstrated they were generally solid operators and could acquire
more sales in the future. “Even though
lending to this particular customer briefly
went outside of Crestmark’s formula, we
believed in them, and found additional
products to provide support,” said Haney.
They provided the additional financing
services because Crestmark intimately
understood the client’s business. This
worked out well for both Crestmark and
the staffing company since they were
able to realize growth and deliver on
The best piece of advice any ABL can
take away is the importance of intimately
understanding the inner operations of
their client staffing companies. ABLs who
develop a clear and ongoing understanding of their client’s needs, focus on long-term relationships, are flexible enough
to meet the needs of changing client
situations, and offer services beyond
receivables financing that support staffing agencies operations will become the
leading lenders of tomorrow TSL
Lisa Beattie is first vice president and
marketing/communications director of
Crestmark. She started with Crestmark in
2007 and since then has worked on building
the Crestmark brand across many mediums.
Previously, she worked as design director at
BBDO, leading a team tasked with branding
for an international automotive company. She
has a B.A. in English from Oakland University,
and has been designing logos, writing copy
and developing ads since she was about five.
She found the approval process was easier in
Patrick Haney is executive vice president,
division president, South Region, for
Crestmark. He spent the last 21 years of
his professional career in the commercial
finance and factoring business. In 1991, he
co-founded Healthcare Capital Management
– which was created to provide working
capital credit facilities to healthcare providers
throughout the southeast – and was named
the “Preferred Provider” to the Louisiana
Subsequently, Commercial Capital
Holding was founded in 1994, and acted
as the corporate umbrella for three lending
subsidiaries including Healthcare Capital.
Commercial Capital was acquired by
Crestmark Bank in December 2007 and
now serves as its regional presence in the
southern United States.
Steven Tomasello is executive vice president,
East Division president, of Crestmark. He
joined Crestmark in December 2009 as an
account executive. In December 2010, he
was promoted to portfolio manager for the
Midwest Region. In November 2012, he was
promoted to group president for the Midwest
Region. In February 2013, he was promoted
to East Division president. He is responsible
for the Troy, Michigan; Boynton Beach,
Florida; and New York, New York offices
where he is focused on asset growth, client
satisfaction, and bringing further efficiencies
to the Region.
He holds an MBA in Finance from Wayne
State University and a BBA in accounting
from Western Michigan University; and is
active in many financial associations.
provides financing as their business requires, and helps them grow to the limit
current business conditions allow,” said
Tomasello. ABLs who fail to become a
true partner with staffing companies may
find themselves with customer attrition.
Therefore, it is important ABLs avoid an
exclusive focus on turning a quick profit,
and instead concentrate on providing financing that meets the staffing agency’s
true needs from the beginning of the
ABLs should also be careful to avoid
excessive relaxation of their lending practices. Typically, a single decision does
not spell doom – it’s more often a series
of actions over time. The essence of ABL
is to provide flexible access to financing; in practical terms, staffing company
balances can go in extremely negative or
positive directions, and generally clients
ask for concessions in both situations.
If the business using ABL unexpectedly
takes a sharp turn for the worse, the
owner may desperately try to negotiate
any deal they can to remain in operation.
Conversely, when business goes well, the
client may also request concessions because of their excellent payment history.
“Especially in the case of a high-per-forming borrower, it’s easy for the ABL to
want to accommodate these requests,”
said Tomasello. As the relationship continues, and if its duration exceeds several
years or more, so many concessions can
be made to the borrower that the collateral monitoring process as a whole fails
to provide the necessary oversight originally intended. This places the borrower
at a far greater risk of default, a lose-lose
situation to both parties.
A proactive approach by the ABL is important. By developing a strong partnership with open lines of communication,
the ongoing negotiation can be set to
protect both the staffing company and
ABL, allowing for preservation of its ability to provide the necessary financing.
How Lenders Can Become Indispensable
to Staffing Agencies
It is essential for ABLs to remember to
gain a precise understanding of the staffing company’s financing needs. However,