If you’re an employer, there’s one thing you should always have on hand — recruitment finance. In fact, the majority of companies that don’t offer this type of loan to their employees are at a significant disadvantage when competing for top talent. Here’s everything you need to know about recruitment finance so you can decide if it makes sense for your company.
Why do you need recruitment finance?
The two main reasons you need recruitment finance are:
(1) to grow your business and (2) to reduce costs.
The first reason is obvious, but what about reducing costs? Saving money where you can help keep your profit margins high and makes it easier for your business to weather bad times or deal with unexpected costs.
Cutting back on unnecessary spending, outsourcing certain tasks and finding cheaper suppliers will all make a difference. While looking at where you can cut back, remember that every single penny counts – even if saving doesn’t seem that significant on its own, over time it will add up. Just look at these examples below of recruitment finance deals used by businesses just like yours
What options are available?
There are a number of options when it comes to recruitment finance, but which ones are right for you depends on your circumstances. Are you an agency looking for credit in order to pay your current and future recruitment costs? Or is a business owner looking for capital in order to grow or take over other businesses? There’s no hard and fast rule about what’s best. It’s up to each individual business owner or decision-maker, depending on their own personal situation.
What if I don’t get a new job?
Some employees remain with their company for 10, 20 or even 30 years. But as a business grows and changes, its needs evolve, too. If you want to keep moving forward in your career, it’s important to understand how change can affect your finances. That’s why it’s so important that you take stock of where you are financially when a new job opportunity comes around. Regardless of whether or not you decide to accept an offer, knowing where you stand will give you the time and space needed before jumping into another position. It can also help prepare you for what’s ahead. After all, change isn’t always easy—but being prepared can make it a lot easier on both your mind and your wallet in the long run.
What are the main types of recruitment finance?
The main types of recruitment finance are soft-dollar loans, bridge loans, and hard-dollar loans. A soft-dollar loan is a revolving line of credit that has flexible terms and allows you to use funds as you need them. A bridge loan is used for a short time period—usually no more than six months—to fund temporary working capital needs. Bridge loans are very short-term in nature but can be expensive due to their high-interest rates (around 10% annually). Finally, hard-dollar loans are longer-term fixed-rate financial instruments with lower costs per unit of borrowing than revolving lines of credit or bridging facilities.