Lendus.

Invoice Finance for Recruitment Agencies

Bridge the gap between paying your temps and getting paid by clients — keep placements flowing without cash flow stalling your growth.

200+ UK lenders
2-minute application
No credit check to apply
FCA-regulated brokers

Rates

0.5% – 2.5%

of invoice value

Advance

Up to 90%

of invoice value

Facility Size

£25k – £5m

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Why recruitment businesses use invoice finance

Recruitment agencies face a structural cash flow problem: they must pay temporary workers weekly — sometimes daily — while clients settle invoices on 30, 60, or even 90-day terms. Even a fast-growing agency can find itself cash-starved precisely because it is winning more business. Invoice finance solves this mismatch directly, releasing up to 90% of the value of unpaid client invoices within 24 hours of raising them. This gives agencies the working capital to cover payroll, fund new placements, and take on larger contracts without waiting months for payment.

Finance types available

Invoice Factoring

Rate
0.5% - 2.0%
Advance
Up to 85%
Control
Factor collects from your clients

Best for: Newer agencies or those with limited credit control resource who want full outsourcing of collections

Invoice Discounting

Rate
0.75% - 2.5%
Advance
Up to 90%
Control
You maintain client relationships

Best for: Established agencies with strong credit control who want confidential funding without clients knowing

Selective Invoice Finance

Rate
1.0% - 3.0%
Advance
Up to 85%
Control
Choose which invoices to finance

Best for: Agencies with a mixed client base who only need funding against their largest or slowest-paying clients

Common challenges

Eligibility

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Market context

The UK recruitment sector turns over approximately £42 billion annually, with over 30,000 recruitment businesses operating across the country. Temporary and contract staffing accounts for around 55% of sector revenue, making payroll funding one of the most common reasons agencies seek specialist finance. Invoice finance is used by an estimated 1 in 4 UK recruitment agencies.

Frequently asked questions

Can I use invoice finance to fund temporary worker payroll?
Yes — this is the most common use case for recruitment agencies. Once you raise a timesheet invoice to your client, you can draw against it immediately, giving you the cash to run payroll before the client has paid. Some providers offer payroll funding as a bundled service alongside invoice finance.
Will my clients know I am using invoice finance?
Not necessarily. With confidential invoice discounting, your clients pay you as normal and never see any reference to a funder. Factoring is disclosed, meaning payments are made directly to the funder, but many recruitment clients are entirely familiar with this arrangement.
How quickly can I access funds after raising an invoice?
Most providers release the initial advance — typically 85–90% of the invoice value — within 24 hours of a verified invoice being submitted. The remaining balance is paid once your client settles, minus the provider's fee.
What happens if a client disputes an invoice or doesn't pay?
This depends on whether your facility is recourse or non-recourse. Under a recourse arrangement you are liable to repay the advance if the client does not pay. Non-recourse or bad debt protection cover, available at additional cost, protects you if an approved debtor becomes insolvent.
Are there minimum turnover requirements to qualify?
Thresholds vary by provider, but most specialist recruitment finance providers will consider agencies with monthly invoice volumes from £10,000 upwards. Some challenger lenders will look at smaller agencies, particularly if the client base includes well-rated corporates.

Related industries

Staffing Professional Services

Guides and resources

What Is Invoice Discounting? Factoring vs Discounting Invoice Finance vs Business Loan Best Factoring Companies

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