You Pay Temps Weekly. Clients Pay in 30 to 60 Days. Invoice Finance Closes That Gap.
The payroll gap is structural in recruitment, and the bigger your temp desk gets, the wider it runs. Most established agencies fund it with invoice finance, and the lenders in this space understand the sector well. We place the deal; the lender decides the terms.
£42bn
UK recruitment sector revenue
30,000+
Recruitment agencies in the UK
Here is the problem in plain terms. You pay your temps on Friday, you raise the invoice on Monday, and your client settles it somewhere between 30 and 60 days later. Every new contract you win widens that gap. Invoice finance draws down against each invoice as you raise it, typically releasing 85 to 90 pence in the pound within a day, with the balance (minus the lender fee) paid over when your client settles. It is not free money. There is a service charge and a discount rate, usually a margin over base. For most agencies it still costs far less than the cash flow problem it solves. We are a commercial finance broker, not a lender, so we cannot promise you a facility or a rate; that depends on your ledger and the lender's appetite. What we can do is place this product for agencies from startup through to multi-desk operations, and tell you straight when the numbers do not stack up against your margin.
Common Challenges in Recruitment
The temp payroll gap
You fund worker wages out of your own pocket for up to 60 days before the client pays. At any real volume, that gap becomes the single biggest constraint on how fast you can grow.
Landing a large contract overnight
A new client wants 40 temps on site by Monday. You have the order but not the payroll capital. A facility can be drawn against the new debtor before the first timesheet, but only if it is already in place when that call comes.
Debtor concentration
If one client is 40% or more of your ledger, most invoice finance lenders will flag it and may cap their exposure to that debtor. Worth knowing before you rely on a facility that quietly excludes your biggest client.
Back-office cost
Running payroll, chasing timesheets, and managing credit control across a temp desk is expensive. Some invoice finance providers bundle this as a managed service and some do not, and the price gap between the two is real.
Finance Solutions for Recruitment
We work with specialist lenders to find the right product for your business.
Invoice Finance
The core product for temp-desk agencies. Draws against each invoice as you raise it, releasing cash for payroll before the client settles. Options run from full factoring, where the lender manages collections, to confidential invoice discounting, where you keep your own credit control.
Learn moreUnsecured Business Loans
For perm-desk agencies or one-off growth costs where invoice finance is not the right fit. Office expansion, compliance spend, or a recruitment marketing push.
Learn moreRevolving Credit
A standing credit line you draw and repay as needed. Useful for agencies with mixed perm and temp revenue where cash flow is lumpy but broadly predictable.
Learn moreWork out your numbers
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Frequently Asked Questions
Can I get invoice finance before I have placed my first temp?
Some lenders will approve a facility against a signed client contract, before a single invoice exists. You need to show who the end client is and that they are creditworthy. The limit at that stage is usually modest, but it can be enough to fund an initial intake. Approval and terms are the lender's call, not ours.
What is the difference between factoring and invoice discounting?
With factoring, the lender takes over your sales ledger and chases your clients for payment directly, so your clients know you are using the facility. With confidential invoice discounting, you run your own credit control and the lender stays invisible to your clients. Discounting tends to suit established agencies with their own back-office; factoring suits early-stage operations or anyone who wants to offload the admin. The cost difference is smaller than most people expect.
What does invoice finance actually cost?
Two charges. A service fee, usually 0.5 to 2% of turnover per year, and a discount charge on funds drawn, typically 2 to 4% over base rate. No broker can quote you a firm rate before a lender has seen your ledger; the lender sets the price based on your debtor quality, concentration, and volumes. We will get you a real number rather than a headline.
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