UK banks have “no appetite” to provide staffing companies with funds for international expansion, according to Graeme Read, group managing director of Antal International.

After approaching the main UK banks over the last three to four years to obtain support for acquisitions in Central and Eastern Europe, Read tells Recruiter: “UK banks are not interested in stepping up to the plate.”

He adds: “They will entertain you for a while, but will then drop you quietly and politely.”

Read criticises the banks for looking at risk on a country-by-country basis rather than on the quality of clients. “Rather than see IBM as a global Fortune 500 company, they look at the local country,” he says, by way of example. 

Read says that as a result of the banks’ reluctance to support Antal’s overseas expansion, the company prefers “to go it alone”, and to fund growth “completely organically”.

Stuart Talbot, senior recruitment development manager at Lloyds TSB Commercial Finance tells Recruiter that the number of UK recruiters “who are likely to ask us for funding abroad is relatively small”.

He explains that before funding a staffing business overseas, Lloyds need to be sure that the business understands the tax, legal and cultural aspects. 

And he advises staffing companies to approach Lloyds at the planning stage rather than asking them for funding at the end of their planning process.

He adds that before providing invoice discount finance, Lloyds needs to be sure it has the right to take legal assignment over the invoices.

Talbot says his division recently provided two UK staffing companies trading overseas with foreign currency facilities in Polish zloty and Czech koruna, allowing them to raise invoices and pay their contractors in the local currency, and removing the currency risk for them in doing business in those countries.

A spokesperson for HSBC tells Recruiter: “At HSBC we continue to support strong, viable businesses including those from the recruitment industry. Within our invoice finance business in particular we have seen real growth in response to increasing demand from emerging markets for skills, this has lead to many opportunities for UK recruitment companies.

“In addition to providing funding we’re able to support businesses through our network of international offices, financial expertise and global connections both in the UK and overseas.”

The spokesperson cites the example of international technical recruiter Fircroft. “In addition to providing funding we're able to support businesses through our network of international offices, financial expertise and global connections both in the UK and overseas.” 

Earlier this month HSBC provided £61.5m in debt funding, as well increased working capital globally to Manchester-based international oil & gas technical recruiter Air Energi as it went through a management buyout. 

• For more on this topic, see News Analysis in October’s issue of Recruiter, out this week.