Recruitment industry body signs innovative partnership
National business funder Scottish Pacific will partner with peak industry body the Recruitment, Consulting and Staffing Association of Australia and New Zealand to offer RCSA members a funding solution designed to help recruitment and staffing businesses to scale-up their operations.
RCSA CEO Charles Cameron said the innovative partnership aims to address cash flow needs and boost the commercial capacity of members of the recruitment and staffing industry’s peak body.
“Our 1,500 member businesses, across Australia and New Zealand, invoice clients on payment terms and may not be paid for 30-60 days, but in the meantime need to pay their agency workers and contractors weekly, and meet their tax commitments, especially with the new Single Touch Payroll obligations,” Mr Cameron said.
“Our members tell us that, because of increasingly long payment terms, cash flow management has become even more important. This initiative offers our members a funding solution that will help create sustainable, powerful growth within our industry, and at the same time contribute to RCSA’s capacity to provide value to members and for them to deliver workforce and talent solutions to clients, regardless of their invoice terms.”
Scottish Pacific CEO Peter Langham praised the RCSA for taking the initiative on behalf of their members.
“We are delighted to partner with the RCSA and offer this RCSA-branded funding solution to suit recruitment and staffing businesses at different business stages and sizes, and without requiring the family home as security,” Mr Langham said.
“Our clients grow at more than three times GDP and we look forward to helping RCSA members with their growth. Scottish Pacific has been funding SMEs for more than 30 years, and we already fund more than 300 staffing and recruitment firms across Australia and New Zealand.
“Many of our oldest clients have come from the recruitment and labour hire industry, because invoice finance is a style of funding that has a proven track record for this sector.”
Mr Langham said Scottish Pacific will be talking with other industry associations in sectors with pressing cash flow issues, to be able to offer similar access to funding to their members.
“It’s a natural fit, given that Scottish Pacific is one of the few providers with the capacity to fund any size business from a start-up through to businesses with revenues of one billion plus, and anything in between.”
RCSA Invoice Finance, funded by Scottish Pacific, will start at $10,000 and provide up to $100m. RCSA members will receive an exclusive discount of 50% on the application fee (up to $10,000 discount).
Launched to members at the World Employment Conference 2019 in Queensland, RCSA Invoice Finance has already had a strong positive response with many recruitment firms inquiring about how this solution could help their business.
Invoice finance as a cash flow solution
Invoice finance, also known as debtor finance or invoice factoring, offers a line of credit linked to and secured by outstanding accounts receivable. Businesses can access this form of funding as needed or as a long-term working capital solution.
“As your business grows, the facility you’ve put in place grows with it, and unlike a traditional bank overdraft there is generally no need for real estate security,” Mr Langham said.
“Invoice finance provides a stand-alone facility that can sit alongside your other business borrowings (for example overdrafts, term loans, and asset finance). There are no capital repayment requirements and the facility helps you grow your business and increase purchasing power through improved cash flow.”
Mr Langham encouraged recruitment and staffing businesses, and their trusted advisers including accountants and brokers, to look into how RCSA Invoice Finance Solutions could fund their businesses.
He also encouraged them to access the Business Funding Guide created by the Small Business Ombudsman (ASBFEO) and Scottish Pacific to ensure their businesses were “finance fit”.