Invoice Finance for Recruitment companies.

Image showing a recruitment professional with a 'we hire' sign

Two of the biggest challenges faced by any business at any stage are cash flow and relationship management. For recruitment companies access to finance is often harder because of their structure and the basic nature of their business.  

It’s all about people  

As a recruitment company you will tend to be people rich and asset poor, meaning that there isn’t the tangible security of plants or machinery to offer up as security. If you’re not cash rich then many finance providers will treat the loan as a pseudo-consumer and may ask for stringent personal guarantees or “all asset” debentures which lock you in for lengthy contracts you don’t necessarily need.  

Cash flow – the double-edged sword 

You will have worked tirelessly to bring on new business to place regular staff and to keep contractors on your book to fulfil these places. Yet, more often than not your customers will demand credit terms and your contractors usually expect to be paid within 7 days of completing their work. The last thing you want to be doing is chasing for payment or being accused of non- or late-payment.  

So you’re left with a cash flow gap which means that without access to outside investment or readily available funding your business will not be able to invest or realise growth plans.  

Light at the end of the tunnel  

Fortunately, there is an option for you, and the remainder of this article explains how you could use receivables finance to bridge that cash flow gap and keep your reputation and relationships intact.  

Receivables Finance  

Most temp recruitment businesses will use a form of invoice finance to ensure that cash flow can meet the weekly demand of contractors’ wages. Also known as Invoice Discounting or Factoring, this type of finance is different to a business loan or other forms of finance.   

  • Invoice finance can help by freeing up cash sitting in unpaid invoices, whether on an individual invoice basis or on the whole debtor book. 
  • With improved cash flow the business can ensure that the weekly wage bill can be paid on time and without the stress of wondering if clients will pay on time. 
  • Safe in the knowledge that the working capital for the business is taken care of you can push on and grow the business by taking on new and larger contracts. 

Individual Invoice Finance from Accelerated Payments  

Here at Accelerated Payments, we’re slightly different we do all the above, plus a little more.  

  • There are no monthly minimum charges as all funding is provided on an individual invoice basis.  
  • We include cover for your customers against bad debts at no extra cost.  
  • Subject to your client confirming you have provided the staff we can make funds immediately available to pay workers/contractors.  
  • No personal guarantees or additional securities needed.  

And you don’t have to take our word from it – here’s what our client First 4 Recruitment have said.  

We realised, after trying to cover that gap ourselves, that it was actually holding us back from saying yes to client requests: we needed a financing solution that would let us meet high-volume contracts, confident that cashflow wouldn’t be an issue,” said company Director, Samba Hall. 

First 4 Recruitment fills an important niche in the recruitment industry, supplying staff to the industrial, logistics, construction, & commercial sectors. This often involves high-volume recruitment requests from clients in particular to large warehouses who need to book dozens or even hundreds of temporary staff at any one time, however the agency needs to pay its people weekly and sometimes clients may take up to 60 days to settle invoices. 

To read the full case study click here.  

To find out more about Accelerated Payments’ flexible individual invoice financing solution contact us today.


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