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Recruitment invoice finance, often called payroll finance, is a funding option for recruitment agencies that advances money against client invoices. This ensures agencies can pay temporary and contract workers promptly, even if clients take weeks or months to settle invoices.
Options include factoring (where collections are managed by the lender) and discounting (where the agency retains control). Payroll finance packages may also include back-office support such as timesheet processing.
Provide goods or services to your customer and issue an invoice as usual.
Share the invoice details with your chosen invoice finance provider.
The provider will advance you a percentage of the invoice value, usually between 70% and 90%.
Your customer then pays the invoice either directly to the finance provider or to you, depending on the type of facility.
Once payment is received, the finance provider releases the remaining balance to you, minus their agreed fees or charges.
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It allows agencies to meet payroll obligations on time, attract more contractors, and grow without cash flow constraints. Some facilities also include debtor protection against bad debt.
Ideal for recruitment agencies in sectors such as healthcare, IT, construction, and logistics, where temp and contract staff must be paid weekly.
Payroll finance is often structured as a comprehensive package, including payroll administration. Lenders typically prefer working with agencies that place candidates into creditworthy companies.
Up to 90% of the invoice value.
Some providers cover both temp and permanent placement invoices.
Yes, many lenders offer payroll and invoicing support.
No, it applies across multiple recruitment industries.
Bad debt protection can be included.
