Here’s a typical example of how invoice finance works for a recruitment agency:
The agency performs work for the client.
The agency invoices the client on 30-day terms.
The funding provider immediately pays 95% of the invoice value.
After 30 days, the client pays their invoice in full.
The funding provider settles the balance of the invoice, minus their charges.
The details will vary, depending on the specific agreement between the funding provider and the recruitment business. These details can include:
The fees and interest rate charged by the provider.
The exact amount of the invoice paid in advance (typically 90-95%).
Who is responsible for credit control.
How rebates are handled (typically for permanent placements).
These specifics are agreed in advance as part of the contract between your business and the funding provider.
The benefits of using recruitment finance specialists
Invoice finance - also known as invoice discounting or invoice factoring - is used by many other forms of business, not just recruitment agencies.
However, when you are considering invoice finance, you should look to work with a provider with extensive experience of the recruitment sector. They will be familiar with the practices and issues associated with recruitment, and with the unique factors faced by businesses like yours.
Their recruitment finance product will be designed to match the needs of recruitment firms. Whatever situation you face, they will have seen it before and helped businesses to overcome it.
Using finance brokers to find the right recruitment finance
It’s easy to become overwhelmed by the huge number of funding providers out there, each with their own finance product.
How can you be sure of finding the solution that’s best suited to your needs, while also being cost-effective?
That’s the role of finance brokers, such as our team at JD Capital Finance. We spend every working day talking to finance providers, and helping to match them with clients.
Our deep knowledge of the funding options available and the current trends in the marketplace mean we’re trusted advisors to our many clients. They want finance in order to run their businesses well - it’s our business to help them achieve that.
The benefits of working with us to find your ideal recruitment finance solution include:
A dedicated finance consultant, who stays with you throughout the process.
You can ask all the questions you want.
We’re committed to helping businesses grow.
If you think invoice finance might be right for your recruitment business, get in touch with us today.
As a founder of multiple businesses, Jamie believes that mindset, discipline and ambition are key drivers for success, both for his businesses and for his clients.
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Disclaimer: JD Capital Finance (Registered office -First Floor, Steeple House, Church Lane, Chelmsford, England, CM1 1NH, Registered Number 10128297) helps UK firms access business finance, working directly with businesses and their trusted advisors. We are a credit broker and do not provide loans ourselves. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. JD Capital Finance can introduce applicants to a number of providers based on the applicants’ circumstances and creditworthiness. JD Capital Finance may receive a commission or finder’s fee for effecting such introductions.