Recruitment Agency Finance

Temporary supply and permanent placements behave differently

Tell us who employs or engages the workers and who invoices the end client. An umbrella, master vendor or managed-service arrangement can change the debtor, deductions and approval process. The end hirer’s size is not proof that your agency has a directly payable invoice against it.

The timesheet-to-payroll chain

• Work is completed and the required client or vendor timesheet approval is obtained.
• An invoice is raised for the agreed supply period, with the correct rate, reference and debtor.
• The provider checks eligibility and makes funding available under the agreed terms.
• Client receipts repay the funded balance; any remaining amount is released after applicable charges and adjustments.

Missing approval, rate differences, disputed hours, payroll corrections and vendor deductions can interrupt that chain. A signed assignment for future work is not the same as an eligible invoice. Increased contractor numbers can raise payroll before approved funding limits expand.

The recruitment invoice finance product guide covers the facility in more detail. This industry page focuses on how your agency’s operating model affects suitability.

Calculate the payroll gap before comparing a facility

Illustrative staffing scenario: 40 workers at an assumed £600 weekly employment cost each require £24,000 per week. Four payrolls before the first client receipt require £96,000, before agency overheads and other costs. The £600 is an invented all-in assumption; use your actual wages, employer costs, holiday obligations and payment dates.

That £96,000 is a timing requirement, not a proposed lending limit. Some initial payroll may fall before timesheets are approved or invoices are eligible. Forecast that earliest gap separately, then compare net availability after debtor exclusions, reserves, existing drawings and charges. Model a delayed approval and the largest client paying late.

Funding alone or funding with back-office support?

Factoring can include credit control; discounting usually leaves the agency managing collections. Recruitment-specific arrangements may also offer payroll or invoicing support. Check exactly who handles timesheets, payroll calculations, invoicing, statutory submissions, reconciliations and errors. Funding does not transfer every employer or agency responsibility.

Compare service and funding charges, minimum fees, setup and administration costs, termination notice, guarantees, security and recourse. A headline advance does not show the full margin impact. Confidentiality and client notification depend on the arrangement, and any bad-debt protection has exclusions.

An established agency investing in systems or opening a desk may instead need an affordable business loan for defined costs. A new desk with no eligible invoices cannot rely only on invoice finance for its first payroll. Explain contribution, client pipeline and the repayment plan without treating pipeline revenue as contracted cash.

Prepare a useful funding review

• Temp/contract/perm split, worker numbers, payroll frequency and actual employer-cost totals
• Client/vendor contracts, approved timesheet example and permanent-placement rebate terms
• Aged debtor ledger, largest client exposure, disputes and credit-note history
• Accounts, payroll-to-receipts forecast and existing finance/security; use business totals, not worker personal records

For the first enquiry, give your company, trading history, approximate turnover, amount, purpose, timing and current facilities. Best estimates are fine; say “Not sure” where needed. You do not need every document to begin. Use business-level totals and agree a secure process before sending detailed confidential records.

NBS reviews the requirement and clarifies gaps before assessing possible routes through lenders and specialist partners. The provider decides eligibility and any offer. Read the existing enquiry’s privacy notice and sharing authorisation before submission.

Recruitment Agency Finance: practical questions

Relevant guidance and sources

• Recruitment invoice finance guide
• Compare facility costs
• Defined agency investment
• Review an existing facility