What is Recruitment Finance?

• Cash flow challenge: I’m paying temporary staff weekly, but clients don’t pay me for weeks or months, leaving a gap I need to fund.

• Perfect for: Recruitment agencies working with contract or temp placements who need fast access to cash without waiting for client invoices to clear.

Novuna helps recruitment agencies release funds from unpaid invoices to cover payroll and running costs, either through our award winning in-house service or by comparing the market to find the best fit for your agency.

We work with providers who specialise in recruitment funding, help you apply, and make sure you get the right deal to keep operations running smoothly.

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What is recruitment invoice finance?

Recruitment invoice finance is a form of invoice financing designed specifically for recruitment agencies. It allows agencies to access a percentage of their outstanding invoices immediately, rather than waiting the typical 30 to 90 days for clients to pay.

This funding type is especially valuable for agencies placing temporary or contract workers, as they often face weekly or fortnightly payroll obligations. By unlocking cash from invoices as soon as they are raised, agencies can maintain smooth operations and take on more placements without funding delays.

How does recruitment invoice finance work?

The process is straightforward:

1. The agency raises an invoice for a client after placing a candidate.
   
   

2. The finance provider advances a percentage of the invoice value, typically between 80% and 95%.
   
   

3. The client pays the invoice in full to the finance provider (or the agency, depending on the agreement).
   
   

4. The remaining balance, minus fees, is transferred to the agency.

This setup ensures agencies have predictable access to working capital, even when clients take time to pay.

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Benefits for recruitment agencies

When comparing your options, consider:

• Improved cash flow: Immediate access to funds to meet payroll and operational costs.
• Growth potential:  The ability to take on larger contracts without worrying about cash flow constraints.
• Reduced financial stress: Predictable funding reduces the risk of late wage payments.
• Flexibility: Tailored solutions that match the agency’s client payment cycles.

Is it the same as payroll finance?

While payroll finance and recruitment invoice finance are closely related, they’re not identical. Payroll finance is specifically focused on covering staff wages, whereas recruitment invoice finance provides broader cash flow support across all agency operations.

Choosing the right provider

When selecting a recruitment invoice finance provider, agencies should consider:

• Advance rates and fees.
• Whether the facility is confidential or disclosed to clients.
• The level of credit control support included.
• Experience in the recruitment sector.

Working with a provider that understands the recruitment industry ensures smoother processes and fewer disruptions.