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Solve your recruitment business funding issues

Published on 1st September 2018 - Last update on 3rd October 2018

Finding the people with the necessary skills, aptitude and experience is critical to the success of any business. Calling on a recruitment agency, who can find the best candidates from across the entire market, can make excellent business sense for many sectors. 

Recruitment agencies can range from national names covering the entire spectrum of jobs to specialists who serve a specific niche. They provide an essential service for both businesses and candidates, offering both temporary and permanent workers. It is a very popular area - as many as 4,000 new recruitment businesses open every year - and it can mean rapid growth and substantial rewards for you.

However, it also means some very challenging funding issues

For permanent staff, the problem is the rebate period. Placing a perm candidate with a client can be lucrative, but only if they are a good fit for the post, pass probation and are accepted as a long-term member of staff. If they are not, the client may pay a much-reduced fee or, in some cases, nothing at all. The rebate period can last for 12 weeks, which can even mean that payment could be clawed back.

For agencies working with temp staff, the problem is payroll. Temp staff, from blue collar workers to executive placements, expect to be paid on a weekly basis. Most clients will pay their recruitment agencies monthly, and often in arrears.

These two issues both give recruitment businesses major cashflow problems.

Solve your cash flow issues by applying for an Invoice Finance facility, or learn more about how your business could benefit.

The solution

Many businesses that work supplying other businesses face problems with late payments, which they solve with Invoice Finance. Using an Invoice Finance facility means that they can receive 90% of the value of each invoice they issue as they issue it, with the remainder to follow when the client pays, less any fees for the service.

So instead of waiting for payment, temp recruiters can have the cash they need to deal with each week’s payroll. Those recruiting permanent staff may find it more challenging to find an Invoice Finance provider because of the risk of non-payment due to the rebate period but, nevertheless, solutions do exist, sometimes just providing a smaller percentage as an advance.

At Rangewell, we recently provided Invoice Finance facilities of £70,000 a month for a leading regional recruitment consultants, who report it has provided the solution to their cash flow needs. In a highly competitive sector, it offers an important advantage, keeping costs down - while being flexible enough to provide cash as it is needed to keep pace with a growing business. Apply for an Invoice Finance facility today, or find out more about how your recruitment business could benefit.

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Richard Mitchell

Richard Mitchell

Content writer
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