It’s Spring which means that the Business Money review of the various factoring and invoice discounting companies has been published.
For those that don’t read the magazine Business Money is a journal published mainly for the factoring industry in which various factoring companies tell each other how good they are.
The review takes two parts. First is a statistical section listing various stats supplied by each factoring company including such things as number of clients, which is quite interesting if the stats supplied by each factor are accurate and not massaged in any way.
The second part of the review is something that I find more contentious as it is a league table of excellence as voted for by 11 hand picked intermediaries.
These unnamed intermediaries included “one big four accountant with strong ABL links” “some major corporate recovery firms with a defined ABL capacity” and “some high volume invoice finance intermediaries”
Interestingly enough when discussing this review with my fellow independent specialist brokers I haven’t managed to find one single one who was invited to contribute and we all felt that it would have added credibility to the article if the reader was aware who had contributed to it.
The factoring companies were rated on the following three criteria:-
Management of the initial introduction
Management of the appraisal process through to completion
Management of the client when the deal has been completed
In view of the above criteria I was very surprised to find that the winner was Shawbrook Business Credit for a variety of reasons. Firstly they are hardly a mainstream ABL player completing just a handful of larger size deals every year. Secondly according to the stats that they submitted, their client numbers dropped from 229 in 2013 to 217 in 2014 yet they have taken top spot in a league table for managing new introductions.
As Robbie the Robot was fond of saying many years ago “Does not compute”
As if that wasn’t enough my own experience of dealing with them was completely the opposite although admittedly it was a couple of years ago when I was so annoyed by their lack of response to my telephone calls and emails trying to find out how my introduction was progressing that I vowed never to deal with them again and wrote up my experiences with them on this blog.
The rest of the top five included a factoring company that I refuse to deal with due to the many horror stories that I have heard in the past, one with a reputation for signing up anything and then chucking it out if they didn’t like it when they had already taken it on and another with very tough underwriting criteria who’s staff are leaving as they can’t get deals approved.
What I found more interesting were the factoring companies that didn’t do well in the survey including Bibby Financial Services who came out of it rather poorly as they were 16th out of 24 yet every year they win the prestigious NACFB award which is voted for by the 1,200 commercial finance broking members of NACFB as opposed to 11 unnamed intermediaries.
Even more surprising Calverton Finance which is a small factoring company that I hold in the very highest regard on all of the key performance indicators listed above, doesn’t even get a mention in the top 24
As most Factoring Blog readers will be aware I don’t hold the many awards dished out to factoring companies by the various organizations in high regard as most of them are a very poor reflection on real life with the very worst being the magazine that shortlisted a non existent factoring broker two years in succession and whilst people might think that awards are just a harmless bit of fun it does allow factoring companies to claim that they are award winners on their marketing material which could give unsuspecting prospects the wrong impression.
If I had to give any of the many awards some credibility it would have to be the NACFB awards due to the fact that they have 1,200 members eligible to vote, all of whom are in the commercial finance broking market.
As someone who has been in the factoring industry since before the dawn of time and for the last 15 years as a broker perhaps Factoring Solutions should hand out their own awards.
If they did, the criteria for an award would be rather different as the problem with two of the three criteria set down by Business Money ie “management of the initial introduction” and “management of the appraisal process through to completion” is that it isn’t the company that is responding but an individual within that company and the many individuals within the same company can all respond completely differently. I only deal with certain individuals at each of the factoring companies that I deal with as I know that they will respond well whereas some of their colleagues may not.
Apologies to Bob Lefroy for my original blog post which was perhaps unnecessarily acerbic