Payroll funding for recruitment agencies

The structural challenge

A temporary recruitment agency pays its workers every week but may wait 30 to 60 days for clients to settle invoices. Each new placement increases the funding gap, so growth itself consumes cash.

Invoice finance built for recruitment

Many funders offer recruitment-specific facilities that advance against timesheets or invoices as soon as they are approved. Some include back-office support for payroll and invoicing.

Things funders check

• Concentration: how much of the ledger relates to one client
• Client credit quality and payment history
• Contracts and terms of business with each client
• Compliance with worker status and payroll rules

Permanent placement agencies

Perm-focused agencies have less of a payroll gap but can face lumpy income. Unsecured loans or revolving credit are often a better fit than invoice finance.

Growing responsibly

Before taking on a large new client, model the extra funding needed and confirm your facility limit can stretch to cover it.