Case study: Invoice finance for the labour hire industry

INSUFFICIENT cash flow is by far the biggest threat to Australian recruitment agencies and the primary reason for business failure within the industry.

Our client is a Sydney-based recruitment service provider that had seen rapid growth over the past two years.

Their business places candidates within the heavy engineering and mining sector, offering clients permanent and interim recruitment services.

MORE: Australia’s slowest paying industries revealed

The problem

The client was not immune to the challenges of running a recruitment agency.  They needed to pay temporary workers weekly, yet in many cases, they didn’t get paid by their clients until more than a month later.

Pressure mounted even further as they won large new contracts.

As well as affecting the day to day costs of a business, the shortfall in cash flow was starting to block plans for future expansion.

The client was faced with a conundrum. Either they could look for alternative ways to fix their cash flow or start turning away valuable business.

The options

At the time we met them, the agency was waiting on two invoices worth more than $100,000. But they weren’t going to be paid for a further 30 days.

Due to their limited trading history, they weren’t able to secure an overdraft or a business loan.

None of the company’s directors wanted to use their family home as security.

And with outstanding wages quickly stacking up, there was no time to set up a long-term factoring contract.

MORE: How OptiPay can help start-up businesses prosper

The answer

OptiPay was able to provide immediate funding to recruitment agency by advancing 80% against their verified invoices.

It took us three days to arrange the finance and, when each invoice was paid, they received the remaining 20% less the cost of funding.

The cash flow injection allowed the client to meet wages and take on more large contracts.

Most significantly, it helped them grow their business.

Find out more about flexible cashflow solutions for your business.

To speak to somebody from OptiPay, simply call 1300 694 686 today.

Share This Story

Cash Flow VS Asset-Based Lending

 Video Transcript Almost every business will have a need to access borrowed capital at some stage during its business cycle. And in today’s video,

Read More

On the lookout to improve your business finances?

Stay ahead, sign up to the Optipay Finance Newsletter.

OptiPay Cash Flow Finder