With recruitment placements on the increase and agencies deciding on whether they should expand their current offering to include contractors, the demand for administration and funding support for recruitment agencies is becoming greater. There are many different ways that Fund My Contractor has helped agencies over the past 3 years to fund their contract placements, and each agency has a different requirement of the facility. Below are a number of scenarios that Fund My Contractor has resolved, helping the agencies who use the facility fund their contract placements:-
1. If You Are a Permanent Agency Who Gets a Contract Placement
If you are a Permanent Agency and one of your clients asks you to find a contractor, you need to decide on how you are going to administer and fund the placement. Many permanent agencies will either try to get the client to pay the candidate and charge the profit only on the deal, or alternatively arrange a split deal with another agency. Fund My Contractor can be ready instantly and is happy to look after placements no matter what the length.
2. When You’re a New Start-Up Agency Who Doesn’t Want to Sign Up to a Long Term Invoice Finance Arrangement
When an agency signs up to an invoice finance arrangement they have to agree to a minimum of 12 months, be able to fulfil the required turnover to ensure that the monthly minimum is not charged, and maintain the arrangement during the year. This can put a lot of pressure on the agency especially in their first year. Fund My Contractor has no long term sign up clauses and there are no monthly minimum fees.
3. If You’re an Agency Who Cannot Get an Invoice Finance Arrangement
One of the requirements of having an invoice finance arrangement is that they will do a credit check on the directors of your business. If there are unpaid CCJ’s, disqualified directors or bad debts on the agency then it can make it difficult to get a facility in place. Fund My Contractor does not look at the credit worthiness of the directors or the agency. We look at the credit worthiness of the client we will be invoicing and funding.
4. When All Your Contract Placements Are Based Overseas
Contract placements can be made in various countries all over the world, but in order for invoice finance providers to feel secure and minimise their risk they will often insist that a portion of the invoicing is done to UK clients. However, sometimes this may not be possible and can affect the level of funding they can provide. They may not be able to provide funding at all if none of your placements are to the UK. Fund My Contractor deals with many different agencies who provide contractors to the UK and all over the world. We are not restricted if all of your clients are overseas, and we can fund contractors in over 170 countries worldwide.
5. If Your Invoice Finance Provider Says No To Funding a Client/Country
Sometimes you are offered a placement that your current invoice finance will not be able to fund due to pay-when-paid clauses, a country or a client they cannot fund, or other restrictions. Fund My Contractor can manage individual placements that your invoice finance provider cannot, including RPO contracts with pay-when-paid clauses. We can also offer international funding if you only have a UK arrangement.
6. When Your Agency is Self-Funded But You Need Funding On One Placement
Some agencies have the luxury of not requiring invoice finance to fund their contract placements. Sometimes, however, cash flow becomes tight or a placement with longer payment terms comes up. Fund My Contractor does not insist that you need to put all contract business through the facility and you can choose which placements you want us to administer and fund, which can be one placement or all of them.
7. When All of Your Contract Placements Are With the Same Client
If you have a great relationship with a client who provides you with all of their placements and they become a large part of your contract book, this can restrict your funding. Your current provider sees concentration of debt as a risk. Fund My Contractor does not have this kind of restriction as we are dealing with many different agencies using many different clients.
8. If Your Invoice Finance Provider Wants You to Sign a Personal Guarantee to Give Funds
Invoice finance companies will often insist that an agency provides a personal guarantee based on the percentage of the funding provided. This gives the invoice finance company protection against fresh-air invoicing and ensures their funds will be collected in the event that the business fails. Fund My Contractor does not ask the agencies to sign any personal guarantee as we base the business we do on the credit worthiness of your client.
Our Fund My Contractor solution is an alternative to the traditional Pay-And-Bill service, or having your own invoice finance arrangement, and has helped many agencies bridge the funding gap on their contract placements. Due to the pricing structure, and the fact that profits are only distributed once the client pays, this method is ideal for high level contract positions. It also shows agencies how invoice finance works without signing up for a full invoice finance facility from day one.
For more information on how Fund My Contractor can help fund your agency or to compare our costings against your current invoice finance provider please do not hesitate to contact us.