The fact that contract placements depend on the candidate being paid by the agency before the client makes payment means there is a strong market for funding for recruitment agencies.
However, if your own organisation has previously considered invoice finance only to dismiss it on the basis of certain misconceptions, it’s worth bearing in mind some of these often overlooked facts about invoice finance.
- It’s widely used by recruitment agencies
Research indicates that more than a sixth of recruiters are using some form of finance against their sales invoices, which equates to 20 times the national average of businesses across the sectors. With companies like TBOS also on hand to assist your business with its invoice finance set up, it’s now a very much mainstream source of funding for recruitment agencies.
- You don’t necessarily need to give personal guarantees
While invoice finance providers often ask for personal guarantees, depending on the circumstances, they may limit the value of them or simply accept a fraud warranty. The latter means that you will only be liable in the event of committing a fraud.
- It’s more affordable than you might think
Even the expense of funding against all of your invoices for a year can be as low as £2,000 or so, or you could always just select and pay for whatever individual invoices you would like to have funded. There doesn’t necessarily need to be any obligation to fund further invoices.
- Even a bad credit history need not be a barrier
One of the best things about invoice finance for recruitment agencies is that it is the strength of the firm’s sales debts that determine eligibility. That means a poor credit history is less important to an invoice finance provider than your agency raising simple, straightforward credit invoices to customers, provided there is some guarantee for payment such as a signed timesheet.
Invoice finance specialists tend to look favourably upon recruitment agencies, given that they usually produce good quality receivables. Not only are the underlying transactions simple, but evidence is also provided by a clear audit trail, such as signed timesheets.
- Both big and small agencies can use it
While you may have imagined invoice finance to be a form of funding for recruitment agencies that have been around for a while and reached a certain size, there’s no minimum size that your business needs to be if you wish to take advantage of it now.
Given that some invoice finance providers give you the option to raise finance against invoices valued at just a few hundred pounds, you might wish to try it out now – not least when you also consider the great numbers of recruitment agencies that have used it to aid their growth.
Would you like to learn more about the TBOS Complete package that can, among other back office duties, set up invoice finance requirements to enable your business to become one of the many firms benefitting from this popular form of funding for recruitment agencies? If so, call the TBOS office now on 0345 504 6333.