Recruitment agency insolvency and rescue

Recruitment agencies, particularly those placing temporary and contract workers, are uniquely exposed to a working-capital gap: the agency must pay its workers weekly while clients often pay invoices on thirty, sixty or ninety day terms. That mismatch means a growing agency can be profitable yet run out of cash, because every new placement increases the funding gap before the client pays. Many agencies bridge this with invoice finance, so a problem with the funding line, a bad debt from a client, or a single large client paying late can create a sudden crisis. When that happens, PAYE and VAT arrears often follow quickly because the wage bill comes first. If your recruitment business is under pressure, the options are the same in principle, a Time to Pay arrangement, a CVA, administration or liquidation, but the speed of the weekly payroll cycle makes early advice essential. A practitioner who understands recruitment funding can help protect the business and your position before payroll fails.