

News from our business partners
This is a guest blog by REC Business partner, Liquid Link
s the UK recruitment industry continues to ride out a period of low market confidence and unpredictable demand, agencies are facing growing pressure to innovate and adapt. For many, the answer lies in diversification. That may mean moving into new markets or sectors or investing in emerging technologies like AI to gain a competitive advantage.
Speculate to accumulate, isn’t that how the saying goes? But with staff to pay, rising costs and pressures like last year’s Employer’s NI hike, many agencies are left with little cashflow buffer, let alone spare funds to invest in new initiatives.
REC members report that forecasting growth trends is increasingly difficult in the current climate, with client needs and market dynamics constantly shifting. Yet the appetite for expansion remains strong, as evidenced by growing interest in data-driven decision making, digital transformation and diversification – that could mean starting new desks, looking beyond the UK, or adopting AI to better identify opportunities – all of which require money!
This is where invoice finance, specifically specialist recruitment finance, can open doors to growth.
While traditional lenders and generalist finance providers may offer invoice finance, they often lack the deep industry knowledge to accommodate the nuances of recruitment. The pace of temporary placements, the need to pay workers before clients settle invoices, and the complex admin involved in contractor engagement all add layers of difficulty that many lenders aren’t equipped to handle.
Darren Levers, Director at Liquid Link, the Finance Division of the Liquid Friday Group, explains:
“Recruitment finance gives agencies the option to pursue new ventures without being held back by cash constraints. Look to specialist lenders who understand the rhythm of recruitment and the importance of paying workers on time. Our job is to make that seamless, so our clients can focus on growing their business.”
Recruitment invoice finance allows recruitment businesses to:
Free up cashflow without taking on debt
Pay wages and expenses upfront, even when clients pay on 30+ day terms
Minimise risk of late payments and bad debt
Realise new opportunities without the usual financial strain.
With a reliable, flexible cash facility in place, agencies are better positioned to explore new markets, upgrade their technology or scale their workforce quickly, without withdrawing funds from other areas of the business.
Setting that aside for a moment, let’s not forget there’s another big shift on the horizon that strengthens the case for integrated solutions. With Umbrella Company Regulation taking effect from April 2026, the compliance burden and accountability for agencies is set to increase significantly, especially with several and joint liability being the mechanism for enforcement.
This has prompted many agencies to scrutinise their PSLs, dropping umbrella providers who fall short on due diligence and compliance.
This moment of reassessment presents a valuable opportunity. Now more than ever, recruitment businesses should look for partners, not just service providers, who can support them on multiple fronts - payroll, compliance, funding, back-office and growth planning.
Our key takeaway here is that finance and recruitment don’t need to be independently siloed. With the right specialist funding partner, you can work together to accelerate your growth goals.
As the REC’s New Markets, New Models initiative explores the path forward for the industry, it’s clear that unlocking growth starts with the right support, be that financial or otherwise, so agencies can seize opportunities with renewed confidence.
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