As recruitment agencies sometimes have to wait weeks for payments from clients, it can often be difficult to maintain a consistent cash flow, so acquiring the right source of funding can make a real difference.
To help smaller businesses obtain lower cost loans, the government has launched the National Loan Guarantee Scheme. By guaranteeing £20 billion of borrowing by the participating banks, the scheme will enable them to borrow at a cheaper rate.
This saving will be passed on to businesses with an annual turnover of less than £50 million through loans with an interest rate that is one percent lower than those otherwise available.
However, doubts have been cast over how helpful this will be to recruitment agencies. Indeed, according to the head of the recruitment finance division of Lloyds TSB Commercial Finance, Stuart Talbot, the benefits are likely to be limited as the move will not influence the banks’ lending criteria.
Other concerns include how the loans will be set up, the amount of time taken to receive the funding and whether the scheme will provide the flexibility usually required by recruitment agencies.
Consequently, recruitment firms should also consider alternative sources of finance, such as invoice financing, which will enable them to obtain a percentage of the fees due without having to wait for payment from clients.
The team at TWP can provide expert advice on the best sources of funding for your business. We have established professional business relationships with corporate finance providers across Surrey, as well as an extensive list of companies and individuals who are looking to invest in viable businesses.
As our team understands the working capital needs of businesses and the requirements of particular funders, we can ensure the best match and negotiate the right financial package for each business. Therefore, if you would like dedicated advice tailored to your particular needs, please contact us.