Professional Services
Business Funding for Recruiting Firms
Recruiting firms operate on a different model than staffing agencies. You place permanent employees and earn a fee, typically 15 to 25 percent of the candidate's first-year salary. The problem is that fees are paid after the candidate starts, and many agreements include a 90-day guarantee period. Cash flow is lumpy because placements cluster unpredictably, and a bad quarter can mean three months without significant income.
Common Uses
What Recruiting Firms Use Funding For
- Cover operating expenses during slow placement periods
- Invest in recruiting software, LinkedIn Recruiter licenses, and job board subscriptions
- Hire additional recruiters and account managers to increase placement capacity
- Fund marketing and business development to build new client relationships
Funding Options
Best Funding Types for Recruiting Firms
Business Line of Credit
A revolving line smooths out the lumpy revenue pattern of recruiting. Draw funds during slow months and repay when placement fees arrive. The flexibility of a credit line matches the unpredictable timing of recruiting income.
Revenue-Based Financing
Get an advance based on your recent placement fee revenue. Repayments adjust with your monthly income, which protects you during quarters when placements slow down.
Invoice Factoring
If you have signed fee agreements with placement invoices outstanding, factor them to get cash before the client pays. This works best when placing with large corporations that have long payment cycles but strong credit.
What Lenders Look For
Qualification Notes for Recruiting Firms
Related Industries
Related Professional Services Funding
By Location
Recruiting Firms Funding by City
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