For recruitment agencies, sourcing an invoice finance provider has always been one of the major hurdles to diversifying from permanent placements into contract placements.
TBOS noticed that when setting up new invoice finance arrangements, banks were tying agencies into 12-24 month agreements with large set up costs and on-going monthly minimum fees. These monthly minimum fees would eat into the profit margins and cause cash-flow issues if they failed to meet their projections. Banks also looked at the director’s credit history meaning some agencies were declined due to CCJ’s, defaults and lack of assets.
The alternative for agencies is to use a third party invoice finance provider who charge based on a percentage of turnover which can be very expensive for high level contract placements and have a long term sign up period.
TBOS Freedom has been developed as a short term recruitment financing solution to overcome these issues and provide an entryway for all agencies to work in the contract market.
The model/ service is aimed at:-
- New start up contract recruitment agencies
- Permanent recruitment agencies who get the odd contract placements
- Agencies who are being refused invoice finance due to bad credit or lack of assets
TBOS Freedom works by administering and funding the contract placement using its own contracts, bank account and funding arrangement.
TBOS credit checks all clients to ensure that debts are insured to minimise the risk to the agency. Our contract templates ensure that all parties are protected and ensure that the placement covers IR35 and AWR regulations.
Once the candidate is eligible to work, TBOS looks after all the timesheet management, invoicing, credit control, contractor payments (either to a limited/umbrella company or via PAYE) within terms set by the agency. Once the client makes payment the profits are distributed to the agency minus the TBOS Freedom charges.
This means the agency does not have to be distracted from selling as all the elements of a contract placement are being handled by TBOS
The main advantages over other funding solutions are:-
- No upfront costs – The TBOS Freedom Fees are taken from the profits once the client pays.
- Agencies are not tied in to a long term agreement– Agencies can use the TBOS Freedom facility for as many placements as they would like.
- Handle currency and international placements – TBOS can fund in numerous currencies and can fund clients in over 130 countries worldwide
- Set up immediately – As the facility is already in use by numerous agencies we can set up a TBOS Freedomplacement within 3 hours (UK only)
TheTBOS Freedom model is innovative to the recruitment industry and offers a fully comprehensive short term funding solution for any recruitment agency looking to make contract placements. Contact us to find out more.