Revolving Credit for Recruitment Agencies
Recruitment agencies experience fluctuating working capital needs as placements ramp up and wind down. A revolving credit facility (RCF) provides a flexible credit line you can draw on when needed and repay when cash comes in — like an overdraft but with better terms and higher limits.
Unlike a term loan with fixed monthly payments, an RCF lets you draw, repay, and redraw within your limit. You only pay interest on the amount drawn, making it cost-effective for businesses with variable cash flow needs.
Key Benefits
- Draw and repay as cash flow needs fluctuate
- Only pay interest on drawn amounts, not the full facility
- Higher limits than overdrafts (typically £50k-£2M)
- No need to reapply each time you need funding
Frequently Asked Questions
How is a revolving credit facility different from an overdraft?
An RCF is a committed facility with agreed limits, rates, and terms — the bank cannot withdraw it unexpectedly. Overdrafts are technically repayable on demand, giving the bank the right to cancel at any time.
Can I use it alongside invoice finance?
Yes. Many recruitment agencies use invoice finance for the core payroll funding cycle and an RCF for ad-hoc needs — tax payments, bonus periods, expansion costs, and seasonal peaks.
What are the costs?
Typically an arrangement fee (0.5-1% of facility), interest on drawn amounts (6-12% per annum), and a commitment fee on undrawn amounts (0.5-1% per annum). Total cost depends on how much you draw and for how long.
Is a personal guarantee required?
Usually yes for facilities under £500k from alternative lenders. Some banks may offer PG-free RCFs for well-established agencies with strong financials.
Related Funding Options
Invoice Finance for Recruitment Agencies
Release cash from placement invoices to fund contractor payroll. Specialist invoice finance for UK recruitment agencies with back-office support.
Unsecured Business Loans for Recruitment Agencies
Working capital for UK recruitment agencies. Fund contractor payroll, office expansion, and marketing. No property security required.
Revolving Credit for Professional Services
Flexible credit facility for UK consultancies, law firms, and professional practices. Manage cash flow peaks and troughs.
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