Recruiters can always turn to invoice financing

15-Oct-2008

I read with interest the comments by KPMG’s Alan Nolan in your feature ‘Storm batters the minnows’ (Recruiter, 17 September).

I agree that the big banks are certainly squeezing recruitment customers’ credit limits, but believe that the invoice finance industry is actually in a unique position to help small and start-up firms in these difficult economic times. Invoice financing is often crucial in providing an injection of working capital, as well delivering ongoing cashflow support. Such services are already stabilising recruitment firms across the country, and can therefore help the wider economy during these rocky times.

Figures from a recent survey we conducted show that one in five of our client accountants have clients that have been refused credit in light of the credit crunch.

Considering the volatile market, recruitment businesses should also consider some kind of ‘bad debt protection’, which can be taken as part of a factoring or invoice discounting facility, to cover their losses should they suffer a debt from one of their suppliers or creditors. Business owners will find comfort in knowing that this is also a growing area. In fact, in the first six months of 2008, our non-recourse business grew by 18%. In addition, online factoring services are ideal for small to medium-sized recruitment agencies, delivering access to finance when it is needed both cost-effectively and quickly.

• Peter Ewen, managing director, Venture Finance