The post-recession aftermath enforced stricter lending criteria and controls on traditional finance providers which led to the growth of the Alternative Finance Market for businesses – and it shows no sign of stopping any time soon. Why?
The motivations behind doing so are quite simple: Business owners need to protect their cash flow and have enough funds available to grow. This is especially the case with recruitment businesses. With increased demand for candidates and the number of jobs filled by recruitment agencies expected to grow from 45% in 2016 to 56% in 2018 according to the REC, competition between agencies has never been so intense.
To stay ahead, and consolidate their position as an agency of choice, recruitment business owners need to ensure they have the financial support they need. It’s about peace of mind – knowing that there will always be funds available to cover workers’ wages, overheads, staff salaries and essential outgoings.
We have supported countless number of recruitment businesses over the last 13 or so years. Many of them have previously partnered with banks and other finance providers. Many more have reported their frustration caused by restrictive funding caps and concentration limits among other things that effectively stifle the growth of the agency and can cause all manner of financial headaches for agency owners; imagine winning a contract to supply 10, 50 or more contingency workers only to be told by your finance provider that because of the caps on your account you can’t take on that contract?
No one knows more than you that recruitment is a sector like no other. It has its own unique challenges and nuances. The recruitment business owners that we work with cite this to be one of the biggest reasons for them wanting to partner with a specialist recruitment finance provider like us – someone who ‘gets’ their business.
Choosing which finance provider to partner with is one of the most important decisions any recruitment business owner can make. Get it right, and the pace at which you grow your agency is entirely down to your own ability and ambition. But get it wrong and you could find your rate of growth being dictated by a third party, and that’s probably not what you envisaged when you decided to start up on your own, is it?