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Using Invoice Finance for recruitment

Published on 26th June 2018 - Last update on 31st December 2018

Looking to expand the size of your team? Whether on a temporary or permanent basis, hiring skilled employees is vital for a business’ growth and success. You could acquire all the latest technology in your sector, but none of it will mean anything if your business doesn’t have access to the right people with the necessary skills to drive your business forward. However, supporting wages puts additional pressure on cash flow, which could mean that other areas of your business lose out when it comes to funding. But there is a solution. Invoice Finance offers you a quick and effective way of raising funds for your business using your unpaid business-to-business (B2B) invoices, and you can use this capital for a variety of purposes, including new hires.

Why should I use Invoice Finance in recruitment?

As your team expands, paying wages each month without affecting your ability to grow and support day-to-day operations can be trying. But in order to remain flexible, a growing number of UK SMEs and recruitment agencies are turning to Invoice Finance for support, which supports your cash flow by releasing up to 90% of the capital tied up in any unpaid B2B invoice worth in excess of £5,000. What makes Invoice Finance so useful in this area is that it allows you to manage and keep track of your business’ expenses with reasonable accuracy. Or, if you’re a recruitment agency, review how much you’re owed by the companies using your services and when you can expect to be paid - providing you trade using B2B invoices.

Having trouble managing your operating costs? Unexpected expenses? Apply for Invoice Finance or learn more about how your business could benefit.

What Invoice Finance solutions are available?

Invoice Finance is often a quick way of advancing the funds that your business would otherwise have received at a later date, making it suitable for a variety of situations within the recruitment process. However, there are two types of Invoice Finance available: Discounting and Factoring. So to help you determine which product is most appropriate for your business, here’s what you need to know:

  • Discounting: If your business is able to generate and maintain an annual turnover of at least £100,000, you could be eligible for Invoice Discounting, providing you can keep your ledgers up-to-date and you have an effective credit control system in place. Rather than having your customer (the debtor) pay your business, they’ll make payment directly to the lender. As soon as they’ve fully paid off the money that they owe, the lender will release a balance (e.g. 10% of the invoice) minus costs and fees.
  • Factoring: Meanwhile, if your business has an annual turnover of at least £25,000, you may want to consider applying for Invoice Factoring instead. You’re still required to maintain up-to-date business ledgers, but this option allows the lender to pursue the customer responsible on your behalf, saving you valuable time. Plus, you can also choose to be discrete about the fact that you’re using the services of an Invoice Finance lender. In addition, some lenders may even offer you Bad Debt Protection, safeguarding your business in the event that your customer goes bankrupt or doesn’t settle what they owe.

Need help expanding the size of your team?

In order to scale your business, hiring more staff is often vital, especially around a period of growth. Yet despite the necessity, many developing SME businesses find this difficult to achieve safely. Fortunately, there are a number of finance solutions available that could help minimise the risk to your working capital, including Invoice Finance. Invoice Finance allows you to turn your outstanding B2B invoices to your advantage by releasing up to 90% of the funds they contain. But with so many Invoice Finance lenders to choose from, how can you be certain you’re applying for the most appropriate agreement for your business’ circumstances? Simple.

At Rangewell, we’re an Access to Finance specialist working with over 300 lenders to offer you an overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide through the application process. We’re with you every step of the way. So if you’re looking to hire your next employee with the help of Invoice Finance, apply today or find out more with Rangewell.


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David Harrison

David Harrison

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