Business loans for recruitment agencies: paying temps weekly when clients pay monthly

Every Monday, a recruitment agency with a busy temp desk makes the same quiet bet. It pays dozens of workers for last week’s shifts, then waits a month or more for the clients who used those workers to pay. Grow the desk by ten more placements and the bet doubles. That simple mismatch explains most of the borrowing in recruitment, and it has become sharper since super started following every pay run.

Is your agency mainly perm, temp or contract?

Lenders don’t see “recruitment” as one business. The mix of desks changes everything about what you can borrow and why.

	Permanent placement	Temp and contract
How you earn	A one-off fee, often a percentage of first-year salary	A margin on every hour worked
Cash timing	Invoice on start date, paid on the client’s terms	Wages out weekly, client payment 30 to 60 days later
Main risk	Feast or famine; guarantee refunds	Funding the payroll gap; client bad debts
Who is the employer	The client	Usually your agency
Typical finance	Line of credit, unsecured loan	Debtor finance or payroll funding

Most growing agencies run both. Perm fees bring margin, temp revenue brings scale, and lenders like the steadiness of contractor hours.

The temp funding gap, in numbers

Say an agency has 60 temps averaging $1,500 a week in gross wages. That’s $90k going out every week before super and payroll tax. If clients pay 45 days after invoice, and invoices go out weekly, the agency is carrying roughly seven weeks of wages at any one time, well over $600k, before it has collected a dollar of margin.

Add Payday Super. Until 30 June 2026, an agency could hold super for up to a quarter before paying it. Now the money has to land in each worker’s super fund no more than seven business days after they’re paid. On a $90k weekly payroll at 12%, that’s around $10,800 of super that has to leave every week rather than piling up for the quarterly deadline. For many agencies the change brought forward a six-figure sum. Our guide to funding superannuation payments looks at the options.

Payroll tax and licensing: what lenders check

Payroll tax. Under an employment agency contract, where you place a worker with a client and pay them yourself, state revenue offices generally treat your agency as the employer and the worker as your employee for payroll tax purposes. Victoria’s SRO notes that the usual contractor exclusions don’t apply to these arrangements, and that relief for exempt clients depends on a declaration the agency must collect and keep. An agency that hasn’t been paying payroll tax on on-hired wages may have a hidden liability, and lenders know to look for it.

Labour hire licensing. Victoria, Queensland, South Australia and the ACT run licensing schemes for labour hire providers, and using an unlicensed provider can be an offence for the client. Coverage differs: some schemes exclude pure permanent recruitment, while Victoria’s is broader. Lenders financing temp and contract desks will want your licence number where one applies, because a lapsed licence can stop the income overnight.

If your agency supplies mainly blue-collar or site workers on long assignments, our page on labour hire business loans covers that model in more depth.

Which finance suits each part of the agency?

1. Debtor finance or payroll funding. Advances most of each approved invoice quickly, and the limit grows as your temp book grows. Ideal for weekly pay runs. Some lenders offer invoice discounting, where you keep control of collections and clients don’t need to know.
2. Business line of credit. Good for perm-heavy agencies smoothing lumpy fee income, and for covering super and BAS dates.
3. Unsecured term loan. Suits one-off spending: a new office, hiring three consultants before they bill, or a new CRM and job board subscriptions.
4. Bank overdraft or term loan. For an established agency with a director willing to offer property, the bank will often be the cheapest. Take that offer seriously.

Our side-by-side of invoice finance versus an overdraft helps if you’re choosing between those two.

Temp payroll due before your biggest client pays? Tell us what’s coming up for a call back; your credit file isn’t touched when you ask.

Risks lenders weigh in recruitment

Client concentration. A large share of revenue from one client is common, especially in government and health staffing. Most facilities apply a concentration limit per debtor.

Guarantee rebates. Permanent placements usually carry a replacement guarantee, often around three months, sometimes with a partial refund if the candidate leaves. Lenders see recent perm fees as slightly less certain until that window closes.

Margin squeeze. When award rates rose 4.75% from 1 July 2026, agencies with fixed charge rates in long client contracts absorbed the difference until they could re-price.

Economic cycle. Hiring freezes hit permanent fees first. Temp hours often hold up better because clients use temps to avoid committing to headcount.

Bad debts. A client entering administration can leave weeks of unpaid timesheets. Ask whether a facility includes bad debt protection, and at what cost.

Documents to pull together

• Aged debtors and creditors reports
• Client list with payment terms and share of revenue
• Copies of key client agreements and your standard terms of business
• Payroll summaries, recent STP reports and evidence that super is up to date
• Payroll tax returns and labour hire licence details where relevant
• Financial statements and business bank statements for the past year or two

If wages are due this week and the money isn’t there, our page on payroll due when cash is short walks through the fastest realistic options.

Example: an IT contracting desk outgrowing its overdraft

Hypothetical, for illustration. A Brisbane agency places software developers and project managers on contract with state government agencies and two large insurers. It has grown from 25 to 45 contractors in a year. Contractors are paid weekly, clients pay in 30 days, and the bank overdraft is fully drawn most weeks.

With Payday Super adding to the weekly outflow, the directors move to a confidential invoice discounting facility. The limit is tied to approved timesheets, so it rises automatically as the desk adds contractors. The overdraft is cleared, the bank relationship stays in place for everyday banking, and the directors stop juggling which supplier to pay late.

Find funding that grows with your desk

You already know the value of matching the right person to the right role. Finance works the same way: the right facility for a temp-heavy agency looks nothing like the right one for a boutique perm search firm.

The form is short, roughly a minute’s typing, and sending it leaves your credit history exactly as it was. Your details go to us alone, not out to every funder in the market, so there’s no wave of cold calls. A member of our team reads your situation and picks up the phone to discuss it. Give us accurate figures on payroll, debtors and turnover, and we can point you to a suitable facility without false starts.

Check your agency’s funding options →