What is invoice factoring?

Invoice factoring is a financial service where businesses sell their unpaid invoices to a factoring company. This allows them to receive immediate cash flow without waiting for clients to pay, helping manage operational expenses and working capital needs.

How does invoice factoring work?

Invoice factoring works by submitting your outstanding invoices to a factoring provider. The provider advances a percentage of the invoice value (usually 80-90%). Once your client pays the invoice, the remaining balance is paid to you minus a small factoring fee.

What are the benefits of invoice factoring?

Benefits of invoice factoring include improved cash flow, faster access to funds, reduced payment delays, and no need for traditional loans. It helps businesses manage growth, cover expenses, and avoid cash flow gaps caused by slow-paying customers.

Is invoice factoring suitable for small businesses?

Yes, invoice factoring is ideal for small and medium-sized enterprises (SMEs) that invoice other businesses on credit terms. It is especially helpful for businesses with cash flow challenges or those experiencing rapid growth but facing payment delays.

What is the difference between invoice factoring and invoice discounting?

Invoice factoring involves selling your invoices to a factoring company, which then manages credit control and collections. Invoice discounting, however, allows you to borrow against unpaid invoices while retaining responsibility for collections and customer relationships.

Recruitment Factoring - Recruitment Finance UK

What is Recruitment Factoring?

Recruitment factoring gives you instant access to the money you’ve already earned. Instead of waiting 30, 60, or even 90 days for payment, you receive up to 90% of the invoice value upfront.

This funding can cover payroll, tax, marketing, and operating costs, so you can focus on growing your placements and winning new clients.

When your client pays, the factoring company releases the remaining balance (minus a small service fee).

Why Choose Simply Factoring Brokers?

• Faster Cash Flow – Get funds released within 24 hours of invoicing, perfect for meeting payroll deadlines

• Specialist Recruitment Finance Experts – We understand the challenges of temp, perm, and contract placements, and the solutions that work

• Optional Back-Office Support – Many lenders offer payroll management, timesheet processing, and credit control services

• Independent and Transparent – We’re brokers, not lenders, so you’ll always get honest advice and the most competitive deals

• Flexible Funding Options – Choose between confidential or disclosed factoring, depending on how you want to manage client relationships

Who Can Benefit from Recruitment Factoring?

• Temporary and contract staffing agencies
• Start-ups and growing recruiters
• Agencies struggling with cash flow due to slow-paying clients
• Recruitment businesses looking to expand operations

If you invoice clients after placements, factoring can unlock the cash tied up in those invoices, giving you immediate working capital.

How Recruitment Factoring Works

1. You invoice your clients for staff placements or contractor hours.

2. The factoring provider advances up to 90% of the invoice value within 24 hours.

3. Your client pays the funder on the agreed terms.

4. You receive the remaining 10%, minus a small fee.

It’s quick, straightforward, and scales with your business.

Benefits of Recruitment Invoice Finance

Maintain steady cash flow during busy or seasonal periods
Never miss payroll for temps and contractors
Access extra capital for growth, marketing, or new hires
Access extra capital for growth, marketing, or new hires
Reduce stress around late-paying clients

Call for invoice factoring services
Fund Your Business Today – Call 0333 772 1558 to release funds tied up in your invoices

FAQs About Recruitment Factoring

How does recruitment factoring help with payroll?

Recruitment factoring releases up to 90% of your invoice value within 24 hours, giving you the cash to pay temps and contractors on time even if clients haven’t yet settled their invoices.

Is recruitment factoring suitable for start-up agencies?

Yes. Many factoring providers specialise in recruitment start-ups that lack trading history. As long as you invoice creditworthy clients, you can often qualify from day one.

How much does recruitment factoring cost?

Fees typically range from 1–5% of the invoice value, depending on your turnover, client base, and funding volume. As brokers, we compare multiple lenders to get you the best rates.

Will my clients know I’m using factoring?

That’s up to you. You can choose disclosed factoring (your clients know and pay the funder) or confidential factoring (your clients pay you as normal). We’ll recommend the right setup for your needs.

What types of recruitment agencies can use factoring?

Factoring suits all types of recruiters including temporary, contract, and permanent placement agencies, across sectors like healthcare, IT, logistics, and construction.

How long does it take to get started?

In most cases, you can have a recruitment factoring facility in place within a few days. Once set up, funds are usually available within 24 hours of invoicing.