“The inclusive Bad Debt Protection has proven to be a valuable and welcome addition to the funding facility. We have had several experiences where our customers have gone into liquidation and we have benefitted from several successful payouts negating the impact on our business.
Ross Lovett, Madisons Recruitment
Sector: Recruitment
Facility Size: £300K
Ensuring the future health of a business is the key priority for directors and owners and whilst the generation of income is understandably the top focus, ensuring you get paid for a job well done is paramount too. Madisons Recruitment, a specialist recruiter servicing the construction sector found why the right funding solution can be just the job.
With a combined experience of 25 years within the construction sector, Madisons Recruitment was founded by brothers Ross and Alex Lovett in 2015. Driven by their passion to deliver a unique market leading recruitment solution they committed, to only recruiting team members who have worked within the sectors they specialise in. This ensured that they can, deliver a tailored solution which demonstrates their real understanding of the needs of both clients and candidates.
Based in Hertfordshire, with satellites in London and Oxford, the firm can name some of the largest housebuilders in the UK within their client base alongside smaller local builders.
The recruitment sector has inherent cashflow challenges. Recruiters need to pay contractors weekly and then invoice clients monthly with 30-day credit terms so there can be a significant gap between paying wages and receiving invoice payment. It’s vital that the business has sufficient cashflow to bridge this gap.
As Ross comments: “We have always used invoice finance as a funding solution of choice to support our cashflow requirement. However, our incumbent funder toughened up its policy on the construction sector and began placing credit limit restrictions on our clients. This resulted in a reduction in the amount of funding we could access. They were unwilling to support our business with flexible funding limits to enable our growth and insufficient cashflow could hold our business back, so we approached our financial advisor – Fairway Business Finance – who recommended we speak to Pulse Cashflow Finance”.
Impressed with their speed and flexibility, the decision to switch to Pulse was made quickly and the process was easy. With an initial funding facility of £300k in place, the business continued as usual. That was nearly two years ago and as the business has grown so has the facility size which stands at £450k.
As Ross continued: “Working with Pulse has delivered many benefits. It’s been really reassuring that the facility has grown with us. Having sufficient headroom means we don’t have to change our customers payment terms to support our cashflow. They also manage our invoice collection process leaving us to focus on driving new business.”
However, as all businesses know, ensuring you get paid for a job well done is critical. Unfortunately, at times, this can, prove problematic if a client went into liquidation or defaulted for other reasons. Ensuring your business is protected from non-payment of debt is equally as valuable as having the cashflow to grow a business. Bad debts can severely impact the financial health of the business.
A key feature of Pulse’s funding facility is an inclusive bad debt protection solution, which protects the client in the situation where their customers are unable to pay invoices. Credit checks are performed on clients’ customers and debtor protection is included should a customer fail. This service is included within their one single inclusive fee.
Every time we take on a new client, Pulse undertakes their own due diligence on our clients and provide us with a credit limit based on their credit worthiness which provides us with peace of mind that our clients will be able to pay us.
As Ross says: “The inclusive Bad Debt Protection has proven to be a valuable and welcome addition to the funding facility that we have with Pulse. The challenging times that we are currently operating in make it difficult to have the same visibility on our customers and how they are performing. We have had several experiences where our customers have gone into Liquidation and with Pulse’s help, we have benefited from several successful pay-outs negating the impact on our business”.
Madisons Recruitment are going from strength to strength having doubled turnover each year and are currently forecasting £3m this year. With a flexible supply of cashflow and the peace of mind that they will get paid even if their customer defaults, Ross has ambitious plans for the future.
As Ross concludes: “We have been with Pulse Cashflow over 2 years now and with their support, our plan is to grow our business by 20-25% every year. Having the confidence that our funding solution with Pulse will grow with us gives us the freedom to focus on making these growth plans happen whilst having the peace of mind that if a customer defaults on payment they have it covered!”
