Permanent Recruitment Invoice Factoring: A Flexible Funding Solution for Agencies

Permanent recruitment is a vital sector for UK employment and the wider economy – but from a cash flow perspective, it can be challenging. Unlike temp placements or contract roles that offer recurring invoicing, perm placements often involve a one-time invoice, and clients can take 30, 60, or even 90+ days to pay.

For recruitment agencies, this creates a gap between revenue earned and revenue received – impacting your ability to invest in marketing, hire staff, or take on new roles. That’s where permanent recruitment invoice factoring comes in.

At The Best Finance Group, we help UK recruitment firms access specialist invoice finance solutions designed specifically for permanent placements. Whether you’re a start-up agency or an established firm with millions in annual turnover, permanent recruitment factoring can unlock working capital, improve cash flow, and support business growth.

In this guide, we break down what permanent recruitment factoring is, how it works, and how to choose the right provider.

What Is Permanent Recruitment Invoice Factoring?

Invoice factoring is a form of business finance that allows companies to access the value of unpaid invoices upfront. When tailored to permanent recruitment, this means your agency can sell its perm placement invoices to a factoring provider in exchange for a fast cash advance – usually within 24 – 48 hours of raising the invoice.

This funding method is ideal for recruitment agencies dealing with long payment terms, high invoice values, or variable client payment behaviour.

How It Works:

1. You place a candidate and invoice the client (e.g. £8,000 for a perm placement).
2. Your factoring provider advances up to 90% of the invoice value (e.g. £7,200) within 1–2 days.
3. The client pays the factoring company within the agreed term (e.g. 60 days).
4. You receive the remaining balance (minus a small fee) once payment clears.

The result: faster access to funds, smoother cash flow, and the ability to grow without waiting for invoice settlements.

Why Agencies Use Invoice Factoring for Permanent Placements

Permanent recruitment factoring can be a game-changer for small to mid-sized agencies. Here’s why it’s so popular:

Fast Access to Cash

No more waiting 60 – 90 days for payments. Get paid for placements almost immediately.

Consistent Cash Flow

Keep your cash flow predictable and avoid seasonal or client-driven disruptions.

Focus on Growth

Use the cash to invest in job boards, advertising, tech platforms, or new consultants.

Offload Credit Control

Most factoring providers offer full credit control and collections – so you don’t have to chase payments.

Scalable Funding

Your facility grows as your invoicing grows. More placements = more working capital.

Common Challenges in Permanent Recruitment Cash Flow

Permanent placements bring large, valuable invoices – but also longer payment delays. Many clients only pay after their candidate has passed the rebate period (e.g. 30+ days after starting), and even then, payment terms can stretch beyond 60 or 90 days.

For smaller recruitment agencies, that delay can strain cash reserves – especially if:

• You’re scaling rapidly and placing multiple candidates per month
• You’re paying staff and marketing costs upfront
• You’re covering rebates or candidate replacements
• You don’t want to use expensive overdrafts or personal credit

Is Invoice Factoring Available for Permanent-Only Agencies?

Yes. Many finance providers mistakenly focus only on temp agencies, where weekly timesheets and payroll finance dominate the offering. But at The Best Finance Group, we work with lenders who specifically support perm-only or perm-heavy agencies.

In fact, many of our clients are boutique or sector-specific recruitment firms who:

• Focus solely on permanent roles
• Work with large corporates or slow-paying clients
• Require support with invoicing and credit control
• Want flexible funding that scales with them

FAQs About Permanent Recruitment Invoice Factoring

Can I factor just my permanent invoices?
Yes. Many lenders offer separate facilities for perm and temp revenues. You can choose to factor only your permanent placements if preferred.

What happens if the client doesn’t pay?
This depends on whether your facility is “recourse” or “non-recourse.” With recourse factoring, your agency may need to repay the advance. We’ll help you understand the risks.

Will my clients know I’m factoring invoices?
Some lenders offer “confidential” factoring where your clients are unaware. Others act as your credit control team. We’ll help you choose the right setup.

Do I need to factor every invoice?
No. Selective factoring is available if you want to pick and choose which invoices to finance.

Get a Factoring Quote for Your Recruitment Agency

At The Best Finance Group, we specialise in invoice finance for the recruitment sector – including firms placing permanent-only roles or operating a mixed desk.

We compare dozens of lenders across the UK to find the right facility for your business, with:

• Fast approvals
• Transparent pricing
• Recruitment-specific expertise
• Facilities from £50,000 to £5m+

For further information or to get an indicative quote for your recruitment business, contact us on 02921 900000 or email info@thebestgroup.co.uk. Or you could watch some videos on our YouTube channel, like this one below. We explain how we saved a Recruitment Company £60,000 by switching their Recruitment Factoring Facility!