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What is Apprenticeship Finance?

In May 2017, the biggest transformation in the Workplace Learning sector has happened with the new funding mechanism for Apprenticeships. This is expected to create an industry worth over £2.5 billion which also puts the employer firmly in control of the purse strings. However, as all providers know, the cost of marketing, sales, resourcing and providing work place learning can be very expensive and upfront costs are a real barrier to maintaining effective customer relationships.

It is clear that there are very real issues looming with cash flow for Apprenticeship providers, who will need to provide excellent service at the front end or risk losing their customer to a competitor. If provision does not go to plan, then an employer can change provider mid-programme under the new regime. This applies to both levy and non-levy paying employers and is too fundamental an issue to leave to chance. Remember, this market will be saturated with competitors chasing your customers and already some levy paying employers are starting to become frustrated with the number of prospecting calls and emails they are receiving from providers.

Nucleus Commercial Finance have developed a new product to ensure that Colleges and Training Providers remain ahead of the game and have a smooth transition to the new Apprenticeship funding landscape. With a specialist Education Finance team in house, combining commercial finance with on the ground knowledge of education funding the product is tailor made to fit, and to support training providers through any hurdles or pressures predicted as a result of recent policy changes.
Where the employer falls into the SME category with a payroll bill of less than £3M. In this instance the training provider is responsible for collecting 10% of the funding available direct from the employer client in order to receive the 90% balance directly from the ESFA.

However, there are real issues here for the provider in terms of collections and credit control:

1. What capacity do Colleges and providers realistically have for this form of business related credit control?
2. How will they assess the credit worthiness of customers?
3. How do they protect the business relationship when payments are missed or the company becomes insolvent?

Nucleus Commercial Finance are experts in this field and have designed a financial product that ensures that the 90% payment from the ESFA is secure and takes the burden of collecting the 10% away from training providers.

We will prepay the 10% employer contribution directly to the provider, satisfying the ESFA that they can unlock the 90% profile payments.

For training providers it means no collections, no resourcing issues and no bad debts for Finance teams to be concerned about. All records of collection for each employer will be contained in one simple report from Nucleus ready for a simplified mechanism for audit from the ESFA.

Apprenticeship Finance

Apprenticeship finance is a solution designed to assist Colleges and training providers with the increased financial and administrative demands placed on their organisation post May 2017.
This product funds the 10% employer contribution up front, rather than waiting for monthly instalments, unlocking ESFA payments immediately and keeping reporting to a minimum. We perform all of the credit control function for you.
To find out more about Apprenticeship Finance, download our factsheet:

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