Signs of stabilisation in the economy may be warming the late summer business climate, but many recruiters still face days of financial reckoning as cumulative effects from the recession kick in.

Take the construction industry, for example, where businesses such as Carillion, Kier and Rok are reported to have extended their payment terms to 60 days - posing potential knock-on cash flow effects for recruiters.

But would-be ‘angels’ are looking to step into the breach for recruiters should such unhappy moments of truth occur.

Tristan Ramus, managing director of private equity firm Hamilton Bradshaw, is one such player. Hamilton Bradshaw is developing an offering in conjunction with what Ramus called “major high street lenders”, to bridge gaps the banks can’t fill.

He suggests that September could deliver a reality check for recruiters in the form of review of their banking covenants - for which failure to meet expectations could lead to trouble.

“I think that the period from September to January will be an absolute key point in as much as the people that have buffeted up against the lines will need to do something,” Ramus told Recruiter. September is significant because it will mark nearly a full 12 months of recessive trading, he explained.

Ramus expects to see more companies going into administration under pre-pack arrangements or opting for distressed merger/acquisition deals. However, he said other companies - “if the management is smart enough” - could still raise independent capital “before it’s too late, and the control is taken away from the board and put in the bank or receivers’ control and the company is put in winding-up position”.

Depending on the individual recruiter’s situation, its banking partner may not be able to provide any more money. In such cases, Hamilton Bradshaw is seeking to step in. “Where banks can’t get comfortable with further lending, we can get comfortable,” he said. “The businesses may actually be fundamentally quite sound, but they took a long time to make the cuts that were needed, or they might have taken too much cash out in a bull market.”

Paul Saunders, director of Lloyds TSB Commercial Finance’s Recruitment Finance Division, told Recruiter that Lloyds had early on identified covenants as a potential issue and acknowledged that “there are situations where we can’t assist”.

However, Saunders said he had seen recruiters up their game in cash management terms. “Debt management in the recruitment industry has improved no end this year,” he said. They also have reduced borrowing, he added.

But Saunders refuted suggestions that banks are not lending to recruitment businesses. Lloyds TSB has turned on the tap for invoice discounting facilities to the tune of £45m, including a £23m deal. Lloyds currently has a further £57m underwritten to three new invoice discounting clients awaiting pay-out.

“We have in fact increased facilities to existing customers by an additional £10m since the beginning of 2009,” he said. “We are working closely with clients to look at where we can support them to take on significant new projects and support the success of their business.”