But experienced agency owners know the headline rate rarely reflects how funding behaves day to day. What really matters is how funding works when contractor numbers increase, invoices age, or risk levels change.
Understanding these mechanics is what determines your real cost, margin predictability and operational confidence.
The difference between pricing and behaviour
A funding arrangement isn’t just a fee structure - it’s an operational system that interacts with your business.
Areas that often shape real cost include:
- When debt protection becomes active
- How margin is released or retained
- What happens when invoices age
- How credit limits affect funding
- Additional operational charges
- How funding scales with growth
These factors influence cashflow stability far more than the base percentage alone.
Why agencies experience surprises
Many agencies only discover the operational mechanics of funding once trading is underway.
This is where common frustrations arise:
- Payouts changing unexpectedly
- Margin being held back
- Funding slowing under pressure
- Additional charges appearing
- Limited visibility over deductions
Most of these situations stem from misunderstanding how funding works in practice, not from the pricing itself.
What to ask when reviewing funding
Before choosing a funding provider, agencies should ask:
- What affects total monthly cost beyond the headline rate?
- Under what circumstances can funding change or pause?
- When does debt protection apply?
- How does funding behave as the business grows?
- What visibility is available over payouts and deductions?
- These questions provide a clearer picture of long-term suitability.
- A practical guide for recruitment businesses
To help agencies understand funding mechanics more clearly, QUBA has produced a simple high-lever explainer guide on how recruitment funding works in real trading conditions.
It covers:
- Cost behaviour
- Margin mechanics
- Funding flow
- Risk and protection
- Operational impact
Download: ‘How Recruitment Funding Fees Really Work’ explainer
