Simplicity is one of those recruitment finance companies that often try and have a dig at traditional factoring companies as a means of self promotion and I have noticed in the past few weeks that they have published a couple of articles that try to promote themselves by pointing out negatives in their competitors’ offerings that are unfortunately often just not true at all.
There are several factoring companies that offer dedicated recruitment finance facilities and as a large proportion of the enquiries received by Factoring Solutions are for recruitment we have relationships with many of the providers and deal actively and frequently with three of them.
Many factoring providers will attempt to seduce you with headline rates, but this is likely to be a false economy for several reasons.
Firstly, you will pay interest on the amount advanced to you and there will be an additional amount to cover the finance provider’s administration costs (i.e. service fee).
In traditional factoring there will normally be two charges as Simplicity have stated but the factoring companies that offer recruitment finance facilities will have just the one charge and frequently that single charge will be lower than that available from Simplicity.
Again this is incorrect as with recruitment finance facilities (which is what the title of their article was about) there is a single charge levied on sales and slow payers will not result in higher costs.
Thirdly, perhaps most important of all, factoring by default imposes a concentration limit – the maximum amount the provider will cover for a single client. If you work for a large client, that accounts for as much as 20% of your total monthly billings and the concentration limits in place restrict you from gaining access to those funds, your business is going to run into some major problems – will you have enough set aside to pay out what you need to? can your business even continue to trade without these much-needed funds?
That may have been true a few decades ago but not nowadays and Factoring Solutions has been placing clients with factoring companies offering recruitment finance facilities to companies that only have a single customer so the concentration will be 100% which makes the above comment slightly ridiculous as well as patently untrue.
Quite simply you won’t get any money paid to you that week, which means you cannot pay your workers or other essential expenses either. All of which could see the recruitment business you have worked so hard to build and grow fall by the wayside within a matter of days. Can you really afford to take that risk?
The above comment is a bit naughty as that just doesn’t happen. Every finance provider will set a limit but most recruitment finance providers will be happy to increase that limit to accommodate growth within your company as their aim is to assist your growth and not hinder it.
It’s a shame that Simplicity feel that their marketing effort should be aimed at knocking their competitors as not only are the majority of the negatives that they have talked about just not true but they have left out perhaps the most important aspect in the whole arena of deciding which recruitment finance provider one should go with and that is the service levels on offer and judging by the comments made by their disgruntled clients when they contact Factoring Solutions it isn’t hard to see why.
By all means get a quote from Simplicity then feel free to contact us and we will introduce you to a traditional factoring company that has a specific recruitment finance offering that will be cheaper than Simplicity, won’t have a separate interest charge and won’t hamstring growth with ridiculous concentration limits.
Contact Factoring Solutions on 01827 707680 for friendly and professional advice free of charge