Receivables Funding Case Study
Recruitment Firm Employs The Right Solution
Founded in 1993, Prime Staff is a fast growing recruitment consultancy that provides temporary staff for the construction, industrial, engineering and commercial sectors. The firm has two offices and currently employs 12 staff.
Prime Staff found that the inherent challenges experienced by the recruitment industry are often exaggerated by the banks' inflexibility to provide the higher levels of funding required by firms operating in the high value temporary market.
Prime Staff's CEO, Danny McIntyre explains, "Cash flow is always a major strategic challenge for recruitment companies. We pay our temporary workers weekly and also invoice our customers weekly. However, we often have to wait 30 or 40 days for payment, so cash flow problems are inevitable.
"We looked at a number of finance options before our CPA’s recommended receivables funding. Bibby Financial Services impressed us with their commercial awareness and understanding of our industry and we opted for a receivables funding facility. This facility releases up to 90% of the value of our invoices as they are raised, giving us an ongoing supply of cash linked to our sales. They then chase up the outstanding amounts from our customers, paying us the balance of the invoice less their service fee."
The benefits of receivables funding within the recruitment industry are profound. It has allowed Prime Staff to take on a greater number of contracts with more staff placed because it enables them to pay their temporary staff. The collection service allows the company to focus on its core skill of placing people in jobs while Bibby ensures that payment is received.
Danny adds, "Receivables Funding is now incorporated into Prime Staff's long-term business strategy. Our relationship with Bibby Financial Services has allowed us to develop plans for the future which include the launch of three new offices, and to double turnover in the next three years. Bibby Financial Services are fully supportive of our plans to expand and we are on target to meet our goals."
How Does it Work?
- When we receive your receivables funding application, we will assess the creditworthiness of your customers and define a line of credit for them. An agreement will then be signed between you and us.
- Complete your business transaction and create an invoice for the goods.
- You send in the invoice for funding and we verify that the goods were received.
- We will release up to 90% of invoice value within 24 hours.
- We include our details on your invoice and send it to your customer so that they can easily follow the instructions and make payment to us.
- When we receive full payment from your customer, we will release the remaining 10%, minus service fees.
Accounts Receivable Funding – How Much Does it Cost?
Our services are tailored to your business, so the fees will depend upon your specific needs.
There are two types of fees. The first is the cost of the money you use, which is extremely competitive when compared with other forms of finance. The second is a service fee, which covers the payment collection service. We are happy to provide you a proposal.
What Next?
If you would like to speak with one of our Accounts Receivable Funding specialists, simply complete our contact form. Alternatively, you can call us on 877-88-BIBBY (877-882-4229), email us at sales@bibbyusa.com, or request a call back.
