“We bank 80% of the industry’s top 20 recruitment companies” is the astounding claim made by Barclays Bank on the Recruitment & Employment Confederation’s website.
I only know this as I was contacted by someone yesterday who was setting up a recruitment consultancy and had been in contact with Barclays Sales Finance for a quote.
Forecasting a first year turnover of between £300,00 and £500,000 Barclays wouldn’t have been the most obvious choice which is why I asked him why he had gone to them to be told that they claimed to have a monopoly in the recruitment marketplace.
The quote was rather interesting as whilst the factoring commission was reasonably competitive the devil was in the detail to quote one of my good friends.
Barclays wanted £178 to cover the cost of registering the fixed and floating charge and whilst all factoring companies charge an admin fee to cover setup Barclays wanted the £178 in addition to a stinging 2% of the funding limit.
The funding limit was set at £75,000 so the setup fee of £1,500 would equate to 0.5% of sales if the lower projected limit was reached or 0.3% of turnover if they reached their £500,000 upper sales target.
Oddly enough it wasn’t the expensive quote that brought him our way as it was the concern that the funding limit was so tight on a £500,000 turnover that if his customer hadn’t paid by the 60th day there wouldn’t be any funding available for the following month’s invoices .
We put the prospect in touch with a factoring company who not only offer exceptional service levels but offered an in principle facility with a more competitive factoring commission including significantly lower minimum fees, setup fees of £450 all in and a higher facility limit that is more appropriate for the business and not the factor.
All of the above is by the by as the main reason for this blog entry is the bold claim by Barclays that they “bank 80% of the industry’s top 20 recruitment companies”
The article is here http://www.rec.uk.com/filegrab/?ref=168&f=barclays.pdf
I have no way of checking the accuracy of their claim as I don’t know who the top 20 recruitment companies are but leaving aside their unusual terminology about “banking the companies” I find it very difficult to believe that this could be true.
Anyone who knows different, answers on a postcard please 🙂
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Banks can sometimes stretch the nature of their relationship so when they say they bank a business, the relationship may simply be that a branch of a recruitment business uses a Barclays branch to pay in cheques or the have a car on the drip with Barclays, counts as banking!