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• 13 Nov

  Increased Funding Against RPO Invoices For A Recruitment Company

  We have helped numerous recruitment companies that have experienced funding restrictions against RPO debtors. This particular recruiter was turning over £600K pa and was using an invoice finance arrangement with a well-known high street bank. They did business with a well-known RPO and the bank had imposed a tight, 10% maximum prime debtor restriction on this customer. 

  Alternative Finance

  We were able to introduce 2 different alternative financiers, both of whom could relax the funding restrictions. People always, wrongly, assume that these types of restrictions will be common to all providers but that could not be further from reality. There are significant differences in risk appetite between different finance houses, and we are focused on finding the right providers for our clients. The key to our business is being able to get around such problems for clients to find their flexible funding arrangements. We don't charge anything to use our service, but instead, receive a commission if a client goes ahead with a provider that we introduce. Therefore, solving funding restriction issues is a key skill for us.

  The client eventually went ahead with the offer that they received from an independent provider, that we had introduced. The company will benefit from having a "small company" approach, rather than feeling like a number when handled by a large bank.

  Prime Debtor Restriction

  The new funder offered a dramatic increase to a 50% maximum prime debtor restriction against the RPO, significantly increasing the client's working capital finance levels. Additionally, the facility was non-recourse factoring, so they also provided a significant credit limit against the RPO in order to protect our client should anything happen to their debtor. This can be very reassuring in a "pay when paid" situation - to know that the debt is covered by bad debt protection.

  Another example of where we have been able to help companies whose funding has been restricted with regard to RPOs.

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  Other Information

  Article - Funding Invoices For Recruiters

  Article - Invoice Finance Companies That Offer RPO Invoice Finance

  By Glenn Blackman