I Have A Poor Credit Rating; Can I Start My Own Agency And What Challenges Might I Face?
Anyone can start their own recruitment agency and even if the Director has a poor credit rating, then this is still possible.
There are a few challenges that they may face when setting up the company bank account but as long as they are not looking for credit (such as an overdraft, loan or credit card) then they should be able to get a bank account in place.
If the new recruitment agency is making permanent only placements, then there will be no issues with making these types of placements. However, if the agency decides to make temporary or contract placements and they require invoice finance then this may present a challenge to get this in place.
Although invoice finance companies are funding against the credit worthiness of the end client being invoiced, they still need to ensure that the funds being borrowed will be used to pay the candidates and keep up with HMRC and not be used frivolously by the company Director.
Depending on the details of the poor credit rating it may be that an invoice finance company may decide they cannot provide a facility and, in that case, using a solution such as TBOS Freedom is an option available. TBOS Freedom provides its funding based in the credit worthiness of the client, not the credit worthiness of the Director.
Overall, a director with a poor credit rating can start their own recruitment agency and hopefully as the agency becomes successful the Director can repair their credit rating over time.
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