Recruitment invoice finance, also called payroll funding, pays you most of each client invoice as soon as you raise it. So you can pay contractors every week while your client pays you later, often a month or more after the invoice. When the client pays, you get the rest, minus the lender's fees. Sonovate pays up to 100%, Ultimate Finance up to 95% and Bibby up to 85%. None of them publishes its fees, so the only way to find the best rate is to compare quotes.
Market Invoice compares the UK providers that fit this need, and you can get 3 free quotes through our introduction partner, a UK invoice finance provider.
What this page covers
This page covers
How recruitment invoice finance and payroll funding work, four lenders compared on what they publish, what fees look like, contract and permanent invoices, and a worked example
Not covered here
Other industries, lenders' full reviews (see each provider page)
Four lenders for recruitment agencies
| Provider | Paid up front | Min turnover | For recruitment | Figures checked |
|---|---|---|---|---|
| MarketInvoice3 free quotes | Not a lender or a panel. Tell us about your business and our introduction partner, a UK invoice finance provider, handles your enquiry and comes back to you with quotes. Free to you: our introduction partner pays us a fixed fee per introduction. | |||
| Sonovate | Up to 100% | No minimum | Built for recruitment businesses, from "a brand new start-up" upwards. No personal guarantees. Bad debt protection as standard. (sonovate.com) | 13 Oct 2026 |
| Ultimate Finance | Up to 95% | None published | Recruitment Finance: funding plus payroll through RSM's pay and bill service. Set up within one week. (ultimatefinance.co.uk) | 1 Oct 2026 |
| Bibby Financial Services | Up to 85% | None published | Recruitment finance product. You can add back office and payroll support to the funding. (bibbyfinancialservices.com) | 1 Oct 2026 |
| Close Brothers Invoice Finance | Up to 90% | £750k | General lender. Asks for £750k turnover, so it suits established agencies only. (closeinvoice.co.uk) | 14 Oct 2026 |
Advance rate and minimum turnover come from our provider records, checked on each lender's own website on the date shown. The recruitment column is from each lender's recruitment page, read 14 October 2026. None of these four lenders publishes its fees. More lenders are in the provider directory.
How payroll funding works
You pay contractors every week, but clients pay later. Ultimate Finance puts it this way: wages are usually paid weekly, but customer invoices are often paid monthly (Ultimate Finance).
- Your contractor works the hours and the client approves the timesheet.
- You invoice the client, and the lender pays you most of the invoice. Ultimate Finance and Bibby say they pay within 24 hours. That pays the contractor.
- The client pays on its normal terms, to the lender or to an account the lender controls.
- The lender sends you the rest of the invoice, minus its fees.
Some recruitment lenders also run the payroll for you. Ultimate Finance does this through RSM's pay and bill service, and Bibby offers back office and payroll support alongside its funding (Bibby). See our recruitment finance hub for more on payroll and contractor funding.
What it costs
You usually pay two main charges. A service charge, which is a percentage of each invoice. And a discount charge, which is interest on the money paid to you until the client pays. Lenders do not publish their service charges; each one quotes per facility. UK broker ABC Finance puts the discount charge at 1.5% to 3.5% above base rate for established businesses (ABC Finance). It also says recruitment businesses tend to get lower prices than riskier sectors such as construction, because lenders understand them well. Ask about set-up fees, minimum monthly charges and the cost of leaving early too.
Our cost of invoice finance guide has more detail.
A worked example
You place contractors with a client and invoice £10,000 for one week's approved timesheets, on 30-day terms. These are made-up figures, not a quote. The 1% service charge is a made-up figure too, because lenders do not publish one. The discount charge is 6.5% a year: the Bank of England base rate (3.75%) plus 2.75%, the margin ABC Finance uses in its own cost example.
| Paid to you when you invoice (85%) | £8,500 |
| Discount charge: 6.5% a year on £8,500 for 30 days | £45 |
| Service charge: 1% of the invoice | £100 |
| Paid to you when the client pays (£1,500 less charges) | £1,355 |
| Cost of getting £8,500 thirty days early | £145 |
Check that cost against your margin on the placement. Try your own figures in the calculator.
Contract invoices and permanent fees
| Point | Contract and temp placements | Permanent placements |
|---|---|---|
| What you invoice | Hours or days worked, usually weekly | A fee, often a share of the candidate's salary, once they start |
| Proof the lender wants | A timesheet the client has approved | Your signed terms of business and confirmation the candidate started |
| Main risk to the lender | The client disputes the hours | The candidate leaves early and you owe the client a rebate or refund |
| How lenders usually treat it | Funded as normal | Some fund it at a lower percentage, some wait until the rebate period ends, some leave it out. Ask each lender. |
So a mostly-perm agency may be able to draw much less than its unpaid invoices suggest. A mostly-contract agency usually gets more out of a facility, because most of its invoices count. Ultimate Finance says it advances against both temp and perm placements, so ask each lender how it treats perm fees. If you only need help with the odd large perm fee, selective invoice finance lets you fund single invoices.
More 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 |
| Hydr | No minimum (single invoices) | Up to 100% per invoice | hydr.co.uk |
Figures as published on each lender's own website, checked 14 October 2026. Most of these lenders do not publish their fees.
Sonovate is built for recruitment, and Bibby and Ultimate Finance have recruitment products. Time Finance, Close Brothers and Hydr fund many sectors. Hydr funds single invoices, which can suit an agency with the odd large perm fee.
Specialist niches
- IT contractors: Day rate placements, often with large companies.
- Nursing & healthcare: NHS and private hospital clients.
- Care agencies: Often council clients.
- Industrial & warehouse: High volume, lower margin placements. Factoring can suit the volume of invoices.
- Executive search: Larger single invoices and longer payment terms. Selective invoice finance may suit you better.
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.
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