How invoice finance helped a growing Recruitment agency

Anne Lloyd was working for a large, Bristol based nursing recruitment agency when she first thought about setting up on her own. Though earning a good minimum salary of £30k pa, she was constantly aware of the rewards that running her own agency would offer.

Like many entrepreneurs Anne had no experience of payroll or accounting and the success of the business rested on her selling ability and contacts. Her agency supplies nurses and auxiliaries to NHS Trust hospitals and to care homes, and she estimated that they would pay her within an average of 45 days.

Anne quickly realised that she would need extra help but couldn’t afford to take on more staff. She also needed to keep a tight control on her cash flow. After sourcing an invoice finance facility and back office support provider (at a cost of 6% of her turnover) – her business started to grow. She no longer had to worry about her staff being paid on time; that her clients paid their invoices late or her tax was paid.

This support enabled Anne to grow her business to a turnover of £250k and a profit of £30k within a year. Invoice Factoring was her next move and she looked at whether she could take on an assistant to take care of administration and payroll.

However the invoice factoring facility was likely to cost around £6,000 per year (including discount charge) and an experienced part-timer would cost at least £12k per annum (and would require
4 weeks annual leave).

She eventually decided to retain the back office support facility for another year. Her turnover is still growing and is forecast to hit £650k now that her former colleague from her previous company has joined her.

Also in this section:
Invoice Factoring Overview
Invoice Discounting Overview
Who is suitable to use invoice finance?
Invoice finance vs. business overdrafts
Factoring and invoice discounting buying guide
Invoice finance glossary of terms