Neutral vendor and workforce management company the Albany Group has apologised for any inconvenience or financial hardship to staffing companies and contractors after admitting that a £3m factoring facility for three of its UK companies has been withdrawn.

The companies concerned are Albany Management UK, Albany EMEA and Albany Employment Services. Established in 1989, Albany has 14 offices worldwide. Clients include GSK, Carphone Warehouse and Boeing. Recruiter understands that Albany’s other companies - Albany Services (USA); Albany Technologies (UK); Albany Netherlands NV; Albany Tecserv (Ireland), and Albany Asia Pacific - have not been affected.

In a letter sent to a recruiter, dated 12 January, Albany says that on 16 December 2009, “the lenders stopped us drawing funds down despite having in excess of £7m of receivables against a maximum draw down facility of £3m”. The lender was not identified in the letter, but an RBS spokesman confirmed that RBS Invoice Finance is the lender involved. He added that RBS would like to comment but could not do so without the client’s permission. As Recruiter went to press this was not forthcoming.

At the same time Albany says the lenders “proceeded to capture all in coming funds received from clients and staffing companies with the sole objective of recovering money owed them”.

As a result, the company admits that “for the last three weeks it has not been able to pay many contractors or staffing agencies who are owed money by any one of the three Albany companies”.

According to the letter, the funding facility which was used to finance specific businesses as well as to provide working capital for the group, was withdrawn following a review by the lenders of Albany’s contract with two major clients. The letter says: “The reason for this decision was because of the extended payment terms which are often associated when dealing with corporate clients, and because a large proportion of funds due from these clients are payable to staffing companies as opposed to contractors.”

The letter ends: “We deeply apologise for any inconvenience or financial hardship this situation has caused and we would like to thank everybody involved with Albany for your continued support.”

Martin Glick, chief executive and founder of Albany, told Recruiter in an email: “I am not prepared to discuss confidential information with a trade magazine.”
One recruiter who has a small number of contractors abroad working through Albany, told Recruiter that his company would limit the potential damage by dealing direct with its clients. The recruiter, who wished to remain anonymous, said: “We have worked with Albany for a number of years and we want to support them but we are trying to protect ourselves.”

The Professional Contractors Group said the letter “is concerning” and “a reminder that agencies are not immune from cashflow problems”.