Because contract placements are contingent on the agency paying the candidate before the client pays, there is a large market for Funding For Recruitment Agencies.
If your company has previously investigated invoice finance but dismissed it due to misunderstandings, it’s important remembering some of these sometimes ignored truths concerning invoice finance.
1. It’s widely used by recruitment agencies
According to research, more than a sixth of recruiters use some type of finance to pay for their sales bills, which is 20 times the national average for all firms. With businesses like TBOS on hand to help you set up invoice finance for your business, it’s become a fairly common source of capital for recruitment agencies.
2. You are not required to provide personal guarantees.
While invoice finance companies frequently want personal guarantees, they may limit the amount requested or just take a false warranty based on the circumstances. The latter indicates that you will only be held accountable if you commit fraud.
3. It’s less expensive than you may expect.
Even funding against all of your invoices for a year can cost as little as £2,000, or you can pick and choose which particular invoices you want to support. There isn’t necessarily a requirement to fund more invoices.
4. Even a poor credit history does not have to be an impediment. One of the best things about invoice finance for recruiting agencies is that eligibility is determined by the strength of the company’s sales debts. That implies an invoice finance provider is less concerned with your agency’s poor credit history than with your agency issuing basic, uncomplicated credit invoices to consumers, as long as there is some assurance of payment, such as a signed timesheet.
Recruitment agencies are generally regarded favorably by invoice finance experts, as they provide high-quality receivables. Not only are the fundamental operations straightforward, but there is also evidence in the form of signed timesheets.
5. It can be used by both large and small agencies. Long you might think of invoice finance as a source of capital for recruitment companies that have been established for a while and have grown to a particular size, there is no minimum size requirement if you want to use it right now.
Given that some invoice finance companies allow you to raise funds against invoices for as little as a few hundred pounds, you might want to give it a try right now – especially given the large number of recruiting firms that have utilized it to help them grow.