Recruitment Finance

As with many, if not all Recruitment businesses, meeting the demands of weekly payroll can be challenging for anyone’s cash flow!

What is Recruitment finance?

Invoice finance for recruitment agencies can provide not only invoice finance or invoice discounting, but also a payroll services that include timesheet management which not only helps your cash flow, but allows you to pay temporary staff on time and can also relieve companies from running time consuming administrative duties.

How does it work?

Your business sells unpaid invoices to a lender in return for a proportion of their value (up to 90%).

You sign an agreement with a lender which will detail the proportion of the total invoice value (up to 90%) you will be paid immediately (usually called the initial percentage or prepayment percentage)., what balance will be paid to you when your customer pays the invoice in full, and how much you will pay the lender for providing the facility If you choose invoice discounting your relationship with the customer remains unchanged, as you are responsible for collecting payments and managing credit control. If you choose invoice Finance you will no longer be responsible for collecting payments and managing credit control. Instead the lender takes on this responsibility and will have direct contact with your customers.

Also, many recruitment finance facilities also include a payroll facility.

What are the benefits?

  • Speeding up the payment process – You receive a percentage of the total value of new invoices as soon as they are issued, so you don’t have to wait for the customer to pay you
  • Security – lenders will likely protect you against customer insolvency with Bad Debt Protection
  • Simpler administration – you hand over administrative duties to the lender and can have access to online technology that helps you manage your payroll and time sheets more effectively.

How can we help you?

The Finance Exchange is an industry leading ABL advisory business, where our expertise is purely focused on aligning your specific business and finance requirements with the right lenders and then helping you to achieve the right terms and facility structures for your business.  Given our ‘analytical’ and ‘attention to detail’ approach, we are used to working with management teams and   ‘taking the strain.’ with prospective lenders, whilst allowing you to focus on your business.

If you would like our support or have any questions, why not contact us? We are here to help!