The BBA has launched a factsheet aimed at enabling businesses to understand lending.

Total Back Office Solutions can help you with your recruitment agency invoice financing.

Companies looking to outsource back office solutions such as recruitment agency invoice financing may want to take note of a new factsheet from the British Bankers' Association (BBA).

The document outlines in detail the process of how banks calculate interest rates for loans to businesses and how they determine the cost of credit using three key drivers - cost of funds, cost of risk and capital and administration costs.

According to BBA chief executive Angela Knight, small business operators say the process and the security required for them to access finance and not its availability is one of the issues affecting them.

"Small businesses are currently using more than £50 billion of financing from banks, and the amount increased by around five per cent in the last year even though the UK was still in recession," she said.

She went on to explain that the factsheet is aimed at triggering "an open and frank discussion about the realities of providing loans in this economic climate".

Lack of finance is one of the issues preventing recruiters from going into self employment.