Conveying the business's back story and its future prospects in the correct way is essential to getting the best response from lenders to fit your business model. The forecast should include an element of headroom and potential upside.
Many businesses in the recruitment sector are on a significant growth trajectory. The message needs to be well communicated; what is driving the growth and can we demonstrate that the requested facilities are sufficient for business need?
As businesses grow so should the finance team. Lenders need to have confidence that the calibre of the finance team is sufficient to not only manage the business but also provide accurate and timely information to inform their decision making.
Whether it’s particular customers or fee earners the majority of recruitment businesses face concentration challenges. While lenders accept this, it's important to mitigate this as much as possible. For example, conveying any reliance the customers may have on the recruiter as supplier or steps taken to ‘tie in’ key personnel.
The aim here is to help the lender understand why they're being asked to lend and also a clear view of the make-up of the business. This will inform and determine their appetite to lend.
The key message here is control. Is there consistency in debtor days and are we proactively managing cash? Do clients work to our terms or do we work to theirs?
The business plan
Working capital cycle
The finance function
Reliance
Funding growth
Conveying the business's back story and its future prospects in the correct way is essential to getting the best response from lenders to fit your business model. The forecast should include an element of headroom and potential upside.
Many businesses in the recruitment sector are on a significant growth trajectory. The message needs to be well communicated; what is driving the growth and can we demonstrate that the requested facilities are sufficient for business need?