Recruitment is big business. The sector is currently one of the fastest growing in the UK economy, having exceeded even the most optimistic of expectations each year since the end of the recession. This, unsurprisingly, has led to an increased demand for recruitment finance, but is the traditional factoring option really the right solution for ambitious recruitment business owners?
Factoring has long been the recruitment finance option of choice for many recruitment business owners. And while there are some reasons to factoring, there are some notable drawbacks with this type of funding that recruiters need to be aware of.
First let’s take a look at the plus points.
Factoring enables you to get instant access to your cash, typically funding up to 80-90% of the total value of your invoice as soon as those invoices are raised. This bridges the gap between what you need to pay out in the here and now and when your client settles your invoice. And because there are so many factoring companies around, prices are usually very competitive.