Invoice finance for staffing and temp agencies
A staffing agency invoices its clients for hours worked, usually every week, and a lender usually funds an invoice only once the client has approved the timesheet behind it. So the speed and quality of timesheet approval decide how much you can draw, more than your headline advance rate. The lender pays you most of each approved invoice straight away, and the rest, less charges, when the client pays.
How a staffing week works with invoice finance
- Your temps work the week and submit timesheets.
- The client approves them, on paper, by email or in its own online system.
- You raise invoices from the approved timesheets and send them to the lender.
- The lender pays you its advance, and you run payroll.
- The client pays on its terms. The lender keeps its advance and charges and pays you the rest.
If a timesheet is not approved, the lender usually won't fund that invoice yet. You still have to pay the temp: GOV.UK says an agency can only delay pay for a reasonable time while it gets proof of hours (GOV.UK). How the payroll side works, with a worked example, is in payroll funding for recruitment agencies.
Who your clients are matters
| Type of staffing | Who usually pays | What the lender will look at |
|---|---|---|
| Industrial and warehouse | Logistics firms, manufacturers, retailers | How much you bill to one client; busy-season swings in volume |
| Office and commercial | Businesses of all sizes | The credit of smaller clients; how timesheets are approved |
| Nursing and healthcare | NHS bodies, private hospitals, care homes | Whether you are on the buyer's approved supplier list or framework; invoices queried for not following the booking rules |
| Home care | Councils, NHS, and private individuals | Most lenders fund invoices to businesses and public bodies. Bills to private individuals usually can't be funded, so ask. |
| Large clients through a managed service provider | The client, via the provider's system | The real payment terms, the approval process, and any fees the provider deducts |
Lenders often cap how much they will lend against any one client, so an agency with one big client may draw less than it expects. For a large client, you can see how many days it takes on average to pay its suppliers on the government's payment practices service (GOV.UK). Large businesses must publish this at least twice a year.
What lenders will check before they fund you
- How each client approves timesheets, and how often hours are disputed
- Signed terms of business with each client
- That you carry out the checks your sector needs on workers, such as right to work and, for care and healthcare, DBS checks
- That your PAYE and VAT payments to HMRC are up to date
- Any existing charge over your invoices from another lender, which you can see at Companies House
Factoring or invoice discounting?
With factoring the lender chases your clients, which helps a small agency with no credit controller. With invoice discounting you chase them yourself and they usually don't know. Factoring costs more because the lender does the chasing (ABC Finance). For costs, see what invoice finance costs.
Lenders' published terms
| Lender | Published minimum turnover | Paid up front | Source |
|---|---|---|---|
| Sonovate | No minimum | Up to 100% | sonovate.com |
| Bibby Financial Services | None published | Up to 85% | bibbyfinancialservices.com |
| Ultimate Finance | None published | Up to 95% | ultimatefinance.co.uk |
| Time Finance | None published | Up to 90% | timefinance.com |
| Close Brothers Invoice Finance | £750k | Up to 90% | closeinvoice.co.uk |
| Novuna Business Finance | None published | Up to 90% | novuna.co.uk |
Figures as published on each lender's own website, checked 14 October 2026. None of these lenders publishes its fees.
For permanent placement fees and the facility as a whole, read recruitment invoice finance. Sector pages: nursing agencies and care agencies.
Questions
Can I invoice daily instead of weekly?
Yes, if your client agrees. More invoices means more admin for you and the lender, so check whether the lender charges per invoice or per batch.
My client approves timesheets late. Will the lender still fund the week?
Usually not until it is approved. Ask your client to approve by a fixed day each week, and pick a lender whose cut-off time fits your payroll day.
A client wants to pay on 60 or 90 days. Should I accept?
Work out the cost first. Invoice finance charges run for as long as the invoice is unpaid, so longer terms cost you more. If the client is a large business, you can check how quickly it really pays on GOV.UK before you agree.
Will my clients know I use invoice finance?
With factoring, yes, because they pay the lender. With confidential invoice discounting they usually won't, but you need a turnover high enough for the lender to offer it.
Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd
Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind Market Invoice. He spent over three years as managing director of Penny, a UK invoice finance business, and his career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library.
Last updated: