Invoice factoring for recruitment company
Tue, 01/06/2009 - 22:25
Hi,
I recently started a recruitment business but am having experiencing difficulty with my cashflow. The issue is I have quite a few temps working for me which I have to pay on a weekly basis. Naturally there is a lag between my raising invoices and receiving payment which is putting severe strain on my cash reserve.
I enquired in my local bank about a possible loan, but they said I was unsuitable as I have only been trading or nine months. Which I found ridiculous!
A friend of mine uses an invoice factoring solution provided by Lloyds TSB Commercial Finance, which they are really pleased with.
The question I have is – would it be possible for me to arrange invoice factoring for my recruitment business even though I am still in my first year of trading?
Any help would be much appreciated.
Amy Miller.
Hi Amy,
As you have highlighted many banks refuse startup businesses loans, especially when they are related to cashflow issues.
However, invoice factoring is a service which is suitable for startup businesses to use. The reason for this is the money the bank lends is secured against the value of your invoices.
Also in your favor is recruitment companies are the most common organizations to use an invoice factoring service, with around 60% of organizations using a facility at any one time.
I hope this helps. If you need any more information please feel free to contact one of our experts on 0845 388 9725.
Katerina Nicolaou