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If you are looking to finance a recruitment business you are in luck as there are several options open to you especially if you are providing contractors or temps that complete time sheets. That said, if you are a permanent recruitment company there are also several options that are available to you.

If you are a recruitment company thatis paying wages weekly against signed time sheets there is a good chance your clients are only paying you monthly at best. Recruitment businesses or notoriously cash negative for this very reason and if you have a fast growing recruitment business this problem is only compounded.

So what finance solutions are available to you?

Invoice Discounting – invoice discounting will provide up to 90% of the value of your invoices the day after your invoices are raised. This means that you can meet your wage payments without worrying about when your client will pay you. Invoice discounting is typically confidential and as a business you are responsible for chasing the invoices. Invoice discounting will also grow as your business grows as it is linked to your sales ledger.

Invoice Factoring – in a similar way to invoice discounting an invoice factoring facility will release up to 90% of the value of your invoices. However, typically the facility is disclosed meaning your clients are aware of a lenders involvement. This is nothing to worry about as most recruitment businesses will have some sort of invoice finance facility. A factoring facility will also usually include a credit control service so it is a form of outsourcing.

Full back office solutions – a full back office solution can include finance at up to 100% of the invoice value. Additional services include credit control as with factoring but can also include invoicing, payroll along with other services. It can be an ideal solution for a new start recruitment business or one that would rather outsource the administration function and concentrate on sales.

In choosing a suitable financial solution for your recruitment business it is important to understand the requirements of your business, what solutions are available, what services you require and what the costs are.

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