Financing 101 for your marketing or PR agency.
Our top pick: LoanBuilder, A PayPal Service
Customizable business loans with no hidden fees.
- Min. Amount: $5,000
- Max. Amount: $500,000
- One-time fixed fee charged over the life of the loan
- Acclaimed customer service
- Requirements: $100,000+ annual revenue, 1+ years in business, 600+ personal credit score
What are the best business loan options for PR and marketing agencies?
There’s no one right loan for your PR or marketing agency. And approval can depend on what you need the money for. Let’s take a look at some of the most useful types of business loans for your agency.
- Accounts receivable financing. Your firm likely relies heavily — if not solely — on invoices for revenue. It can take between two and three months for client invoices to go through. Invoice factoring involves selling invoices to a third party for a percentage of their value — usually around 80%. Meanwhile, invoice financing lets your agency borrow against outstanding invoices and repay when you receive payment.
- Business lines of credit. Lines of credit can be useful when you need funds to cover ongoing expenses — like overhead costs when you don’t have many clients. It works a lot like a credit card but with a higher limit and different repayment terms. Like with term loans, your agency can use funds from its credit line for any business expense.
- General use business term loans. Your catch-all business loan for large, one-time expenses. Your agency can use these loans for almost anything as long as it’s legal and work-related, so this might be your first choice.
- Equipment financing. You might have thought equipment financing was only for heavy machinery like tractors and industrial dough mixers. But some lenders offer options you can use to purchase or lease technology like computers, video cameras and other expensive devices you may need for producing high-quality content.
- Commercial real estate loans. Every agency needs office space. If you’re looking to buy, you’ll want to look into commercial real estate loans to cover the cost of your agency’s new digs.
- Business vehicle loans. Need to buy a company car or a van for moving around equipment? Your agency might consider taking out a business auto loan.
Compare business loans from top providers
How to decide which loan offer is the best for my business
You’ll have to consider several factors to figure out the right loan option for your agency. First, think about what you need extra funds for. Do you have any specific purchases in mind, or do you need financing to keep your doors open? Look for a loan type that makes the most sense for your costs.
Second, look at your and your business’s finances. How much can your agency safely afford to pay each month? What’s your personal credit score? Knowing these can help you find a loan that your agency can qualify for and pick a loan term with monthly repayments it can easily cover.
Once you’ve narrowed it down to a few lenders, you’ll want to compare costs. The easiest way to do this is to compare APRs on loans with the same term, which give you an expression of its interest rates and fees as a percentage. The lowest APRs are the most competitive rates.
Other factors to consider are the lender’s customer service and its reputation. Can you reach out to your lender outside of normal business hours? What do customers say about their experiences? While online reviews might not be completely representative, enough complaints about one specific problem should send up some red flags.
What common expenses can financing help me cover?
- Bringing on staff. You won’t get very far on your own. Getting financing can help you expand your firm so it can take on more clients and make more money.
- Technology. You can’t have a marketing firm without computers with enough space for large video and design projects — plus all those yearly software fees. Work phones might also be a necessity. A standard business term loan or even an equipment loan can help you cover your tech costs.
- Design costs. Design is crucial to making a marketing campaign a success. Your business can use a loan to cover the cost of software, hiring graphic designers or video editors and anything else you need to make sure your campaign looks its best.
- Printing expenses. While almost everything is digital these days, printing can still be a big cost for marketing and PR firms.
- Office space. You might want to look into a real estate loan if you’re interested in buying an office space — or just get a term loan to cover the down payment on a new lease.
What will I need to apply?
What you need to apply can vary depending on what type of business loan you’re applying for. Most lenders ask for the following information at the minimum:
- Recent business account statements. Many lenders ask to see at least the past three months of your business’s bank account statements to look at your current cash flow.
- Tax returns. Lenders might ask to see both your and your agency’s most recent tax returns to see how much you made in the last year.
- A business plan. Your business plan is where your marketing agency shines: It’s your chance to market yourselves and tell your story. It should include financial statements and your agency’s future projections.
- Proof of ownership. Documents of incorporation or any other official documents naming your business.
Possible challenges to getting funds for a marketing agency
There are two main problems your agency might run into during the application process. First, your business needs to have been around for at least one year to qualify for most business loans, so startups might have difficulty getting funds right away. This isn’t necessarily specific to marketing and PR agencies and there are some options out there — they’re just more difficult to come by.
The second is how well you keep track of your invoices — and how regularly you get paid. If you’re not pulling in enough regular funds to show that your agency is able to handle monthly repayments, you could have difficulty getting approved. Even if you are paid regularly, you might have an easier time applying if you use accounting software like Quicken to keep track of everything in one place.
4 industry tips for getting financing for a PR or marketing firm
- Focus on your business plan. A business plan is important for any type of business. With a marketing agency, it’s also where you get to show off your skills.
- Be specific about your needs. Even if you aren’t sure exactly what costs you’ll be covering with a line of credit, knowing exactly the kinds of expenses you need to fund builds a stronger case.
- Use accounting software. This makes it easier to keep track of your finances, and some lenders even ask to connect to your account so they can view your finances on their own.
- Wait for the right time. For a young or low-revenue marketing agency, a business loan just might not be the best option for you yet. Instead, you might want to kick off a crowdfunding campaign or other alternative and wait until your business can comfortably qualify for a loan.
7 agency success tips from a marketing wiz
Follow these pointers from social media superstar Tai Lopez to set up your new marketing firm for success.
- Practice on yourself. Social media is the best place to learn the practical ropes of marketing and having a strong personal brand is an easy way to prove to clients you know what you’re doing. Experiment with different platforms and techniques to find what works and what to avoid.
- Go for the highest-paying clients first. Doctors, lawyers, hedge fund managers and the like pay big and can help you cover your bases while you’re just getting started.
- Offer freebies and testimonials. Convincing a new client who’s never heard of you is a challenge. Offering free services like an evaluation of their accounts and providing testimonials or contact information of previous clients can help you solidly prove yourself.
- Tell a story. Instead of trying to convince people to use your client’s product or services, draw people in by telling fun narratives about the brand instead. Offer behind-the-scenes peeks, make fun and engaging videos and give the brand a personality.
- Offer packages. Instead of charging one price for your services, offer different combinations for different prices. Some clients always want the VIP package — and won’t work with an agency that doesn’t have one.
- Build your team. You can only get so far on your own — having team members like a personal assistant and an accountant can free up your time to focus on the important stuff.
- Use tracking tools. Numbers speak for themselves and you might have an easier time winning over clients with a solid track record.
A business loan can help your marketing or PR agency grow to heights it could never have reached on its own. Luckily, businesses in your industry have lots of different types of loans and lenders to choose from. Curious about exploring your options even more? Check out our business loans guide to learn about how it all works and compare lenders.
Frequently asked questions
Images: Shutterstock, Tailopez.com