Factoring for recruitment companies and recruitment contractors is one of the largest industry sectors in terms of client numbers in recent years for the factoring industry as contracting is tailor made for invoice finance with the recruitment agencies having potential for rapid growth but having few other assets apart from the outstanding debts on which to secure funding for working capital
Banks have never had much of an appetite for funding fast growing recruitment companies even before the credit crunch killed off their interest in the SME sector completely and that’s why most recruitment contractors have looked to factoring or invoice discounting to finance their growth.
In addition to the funding requirement many recruitment agencies also look to outsource their back office and payroll and there are many options available to achieve this, each of which has it’s benefits and disadvantages which we have attempted to explain here.
Traditionally the two functions were split completely with the funding being provided by a factoring company and the back office either being done in house or outsourced to a specialist payroll bureau or to the company’s accountants.
Additionally there are a number of companies specializing in payroll funding who offer a package of payroll preparation plus finance but not all operate in the same way.
In recent years many factoring companies have now also started offering a back office and funding package which is either completely in house or where the factoring company outsources the payroll.
On the surface many of these facilities look similar but they are not as there are certain payroll and funding packages that we cannot recommend at all and similarly there are factoring companies who don’t live up to their self promotion and offer a very poor service.
We have attempted to explain the advantages and pitfalls of the different payroll funding methods and clicking on the page links will take you to explanations of why we don’t recommend payroll companies that use your sales as collateral with their own factoring companies or the larger payroll companies that use low credit limits to reduce the funding levels and have high financial penalties if you are unhappy with their service and wish to leave.
As one of the leading and longest established brokers specialising in factoring for recruitment companies we know who actually delivers and refuse to deal with the rest so why not contact us for an informal chat as our services are free of charge and come with no obligation at all.
Factoring Recruitment Solutions
The specialist factoring broker for the recruitment industry that knows which factoring companies live up to their promises and which ones do not.
We only deal with those that do.
No minimum annual fees