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Show me the money – the benefits of using alternative finance to fund your recruitment business

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    Show me the money – the benefits of using alternative finance to fund your recruitment business


    In 1996, Jerry McGuire captured a zeitgeist that has endured to this day. “Show me the money” is the 25th most quoted movie line of all-time and it has become a mantra for many aspiring business leader. But, while converting new clients and bolstering the order book makes for great reading, it means nothing unless the money is paid into your account. So, how can alternative finance make a difference to you and your agency business?

    According to the Cambridge Centre for Alternative Finance, the alternative finance market in the UK grew by 41% between 2016 and 2017 as more and more business owners move away from traditional funding sources. Along with seed and equity-based crowdfunding, alternative finance is presently the preferred choice of funding for 40% of SMEs. The question is why?

    Quicker decisions

    You will be all too aware that it can take up to three months for a client to pay their invoices, but there are bills that will need to be paid in the meantime. And if you operate a temporary agency, your workers will expect to be paid each week. This can put extreme pressure on agency owners to always ensure there is enough cash in the bank to honour these commitments.

    Compared with banks, alternative finance providers are accommodating to the ever-changing needs of recruitment businesses. This can be critical, especially if you work with clients who need to scale up and down operationally within short-time frames.

    Faster access to your money

    Having access to the funds that are needed in the here and now is just as important as those that will be required to reinvest into the business and fuel its continued growth further down the line.

    Specialist recruitment funders’ can provide you with access to the finance you need, when you need it. So, even if your clients take 60 days or more to pay, the money can be in your account within a day or two; thereby, guaranteeing a positive cash flow.

    Indeed, 37% of SME’s report having had cash flow difficulties over the last 12 months, whilst one in five businesses say this has slowed down their growth, according to the Federation for Small Businesses.

    Effective credit control

    Ask any business owner what one thing is most likely to make them feel uncomfortable and it will be speaking to their clients about money. You do a great job and invoice on delivery, yet your client seems to take an age to pay for the services you have provided. Yet if they don’t pay, this can add unnecessary strain on your finances as well as eating up credit and funding limits on clients making it impossible to grow.

    There are alternative finance providers who will provide comprehensive back office support as part of their overall recruitment solution. This includes assuming responsibility for chasing debt whilst you focus your time on performing billable tasks.

    Mitigated risk and greater peace of mind

    When it comes to talk of finance, the word ‘risk’ often comes into the conversation. By ensuring that you have the right financial and back office support in place, you should have peace of mind to confidently take on contracts of any size. Our processes include credit checks and due diligence with debt protection provided as part our 100% finance solution.

    The important thing is to make sure that you partner with a specialist financier that really understands the recruitment market and can be flexible to support your business from start up to growth.

    Over the last 15 years Simplicity have been supporting the start-up and growth of recruitment agencies from finance and back office to technology.