A factoring broker’s unproductive day

I had two telephone calls yesterday enquiring about factoring.

The first was a recruitment company who had a funding and back office facility with a back office funding company that I had never heard of but who had been causing them problems for a while with their poor service which was why they were now looking to change.

I don’t really like these back office companies that obtain their funding by “refactoring” with a proper factoring company as not only does the client lose part of their identity but also any problems suffered by the funder can filter down to the client whether the fault is theirs or that of another client.

This particular funder registered a charge to RBS Invoice Finance six years ago but six months later that charge was satisfied and a further charge granted to Bank of Scotland.

Two and half years later that charge was satisfied and a further charge registered to Lloyds TSB Commercial Finance but that only lasted nine months until the business transferred to Leumi ABL where it remained until transferring yet again to Close Brothers eighteen months ago.

Hardly a steady business relationship and the big red flag at Companies House stating that the Annual Return is overdue doesn’t inspire a great deal of confidence either.

I suggested that the company might be better off utilising the services of one of the factoring companies that ran their own payroll services so there was no hidden middleman to potentially upset the apple cart and that would also have another positive advantage that the company would regain their own identity instead of being subsumed into the funding company’s own identity but the lady that was talking to me decided that she didn’t want to operate that way and was happy as she was but would prefer a different funding company.

It was fairly obvious by the conversation that she wasn’t the decision maker but was happy with the way that things worked currently and didn’t want to work with a proper factoring company.

Fortunately I’m too long in the tooth to have to argue with someone who clearly thinks she knows best so I ended up telling her that regretfully I couldn’t help her.

A couple of hours later I had another call from someone looking for a factoring company who wanted to know what my charges were. I explained that I was a broker and my job was to source the most suitable factoring company for his particular needs and there would be no charge for doing that to which he replied that he wanted to contact factoring companies direct and didn’t wish to use a broker. I wished him good luck in sorting the wheat from the chaff and finding himself a factoring company that performed as well as they claimed and ended another unproductive call.

Hopefully today might bring enquiries from people who aren’t quite so set in their ways and might listen to someone who knows what he talking about

Christmas entertaining and marketing foolishness

The Christmas entertainment season is now under way and yesterday I was a guest at Bibby’s Birmingham office bash where we all met in a well known hostelry in the city centre prior to moving off to a restaurant for lunch.

Christmas drinksThere were probably twenty of us milling around when a chappie came in and wandered around looking lost until he came up to us and asked “I don’t suppose that you lot are Ultimate Finance” at which I laughed and said “You’ve got the dates wrong as that’s tomorrow”

Mein host then suggested that as he was here he might as well have a drink with us and as one of the original invitees had dropped out he may as well join us for lunch, which he subsequently did.

I held up posting this until such time as it was unlikely that anyone from Ultimate would read it prior to them all meeting up and cross examining their guests to save him embarrassment.

I was invited to today’s do but unfortunately I couldn’t make it which is a shame as I would have liked to watch ********’s embarrassment when he spotted me there 😀

On a completely unrelated note I had a telephone call this morning from Rachel at Impact Marketing who wanted to make me rich.

UnbelievableShe said that they had been acting for a factoring company and had been so successful in generating business for them that the factoring company could no longer cope which is why they had targeted Factoring Solutions as a replacement to act for.

When I politely suggested that there was no such thing as a factoring company that couldn’t cope with new business and most were struggling to attract sufficient new clients she became quite indignant and suggested that just because I was struggling that doesn’t mean that other factoring companies were, whereupon she wished me a Merry Christmas and the line went dead.

It’s a shame that people like Rachel have to resort to bull**** as I doubt whether anyone would be either taken in or be impressed by such blatant rubbish and it’s also a shame that she didn’t do a couple minutes of homework first whereupon she would have found out that Factoring Solutions wasn’t a factoring company.

Of course if there is a factoring company out there who has been so inundated with enquiries and new business that they can no longer cope please feel free to get in touch with me and I will happily post a retraction as well as offer to look after the excess leads that they can’t cope with.

Some factoring brokers are a joke

Some factoring brokers are a joke as I found out last week when I had a phone call from someone who had read some of my posts on an internet business forum and wanted advice on which factoring company he should deal with.

He had already approached another factoring broker thinking that they would introduce him to the most appropriate cash flow solution for his own unique funding requirements as per their claims on their marketing material.

factoring feedbackThe reality was far different though as he was inundated with telephone calls from at least half a dozen factoring companies all of whom claimed to offer him exactly what he wanted.

Unless I am mistaken the prime role of the factoring broker is to add value by helping the prospect to negotiate the maze of different offerings. How can putting half a dozen factoring companies in touch with the prospect add value as he could just as easily pick half a dozen names at random from Yellow Pages and cut out a middleman that has served no useful purpose.

For the sake of the uninitiated a factoring broker will receive a commission from the successful factoring company for the life of the agreement which can often be for several years.

It is a highly competitive market nowadays with more and more factoring companies and brokers chasing a limited pool of prospects but in recent years companies looking for factoring are now approaching more than one broker so the craftier brokers are trying to cut out the competition by putting more and more factoring companies in touch with each prospect in order to reduce the possibility of another broker winning the business.

This is wrongIs this ethical? Of course it isn’t as the broker isn’t adding any value to the transaction and they are acting primarily in their own interests.

Those that introduce more than one factoring company to the prospect will often claim that they do so in order that the prospect can select the one that he feels most comfortable with but the truth is that he will discuss his requirements with a salesman who will tell him what salesmen often do but once he has signed up he will be dealing with the operations department who could and often do act completely differently.

This particular factoring broker isn’t a one man band but a high profile company who is also an affiliated member of ABFA – not that this means anything nowadays.

Whilst this article isn’t meant as a sales pitch I would like to point out that 90% of people approaching Factoring Solutions for advice will be introduced to the single factoring company that in our opinion and with the benefit of years of experience will offer the best fit for them. On rare occasions it may not be immediately obvious whether a traditional facility or spot factoring would be the most cost effective solution so we introduce the prospect to one of each.

I may not win as many deals as the broker listed above but at least I can sleep well at night knowing that Factoring Solutions has always acted in the best interests of the prospect and not their own interests

Factoring awards – oh no not again

Most of my regular readers will know that I have a bee in my bonnet about factoring awards. It’s not the concept of industry awards themselves that I object to but the fact that they tend to be awarded to the most inappropriate factoring companies with many awards being won by the company who can drum up more people to vote for them than any others.

factoring company of the yearMy main complaint is that factoring companies can stick logos on their marketing material claiming to be award winners which will often fool people into thinking that the company in question is genuinely the best in it’s field when frequently they are anything but.

The most recent awards short list to come across my desk was the Insolvency and Rescue awards and the short list for Asset and Invoice Finance Provider of the Year was as follows:-

Gener8 Finance
Hitachi Capital Business Finance
MyInvoiceFinance
Secure Trust Bank Commercial Finance

I have seen some unusual shortlists in my time but the above just about takes the biscuit.

Gener8 Finance is a company that I refuse to deal for reasons that I won’t go into in public.
Hitachi Capital Business Finance is a factoring company that has a good reputation for service levels but I didn’t think that they had much of an appetite for companies with a chequered financial history such as those that may be generated by the insolvency and rescue profession.
Myinvoicefinance is known as a small broking outfit although they may fund the odd client or two themselves and finally
Secure Trust Bank Commercial Finance which has only been trading for a few months.

A few of my factoring buddies attended the prize giving dinner and I am reliably informed that when the winner was announced it was met by a good deal of sniggering from many of the tables who wondered whether their good fortune had anything to do with the fact that they were sponsoring some of the other awards.

To save me starting another blog post on the same subject I recently received an email from Wealth & Financial International telling me that “after months of voting, research and hard choices they had finally decided on the worthy winners of this year’s awards, celebrating the service, skill and dedication of individuals and firms across a multitude of financial disciplines and sizes; from local heroes to national treasures, from single-office firms to international juggernauts, we celebrate them all.

I am pleased to announce that Factoring Solutions has been awarded “Recognised Leader in Specialised Factoring Brokerage – UK and now I will proudly adorn this great honour on my website but no sniggering please 😀

More factoring company dirty tricks

Since I wrote my last piece concerning a factoring company acting less than respectably I have been forwarded an email sent to most if not all of the clients of a spot factoring company by those masters of self promotion Market Invoice Ltd

From: Thomas Sutcliffe
Date: 21 October 2015 13:29:54 EEST
To:
Subject: MarketInvoice
Hi *****

I believe you are currently using **************** as a spot invoice finance provider.

MarketInvoice work similarly but we are on average 50% cheaper, don’t take debentures or guarantees, have higher advance rates and are much quicker at getting the funds to you.

We have a quick online application if you want to see if we can fund your business. https://p.marketinvoice.com/app#/seller/account/create
It’s free to do and should only take a couple of minutes. Thanks.

Kind Regards
Thomas Sutcliffe
Business Development

Leaving aside the ethics of approaching the clients of a competitor to tell them that you are cheaper (which is highly debatable) Market Invoice are also claiming that they don’t take debentures which again is untrue.

It is a fairly simple matter to conduct a search at Companies House to find details of all the companies that a factoring company has a charge over and interestingly enough if one were to do the same to Market Invoice as they have obviously done to others you would find that the company that allegedly don’t take debentures have actually taken quite a few as follows:-

06059488 Absolute Edge Ltd
08239256 Annecto UK Ltd
08732701 Applebridge Construction Ltd
OC348485 Barlows (Retail Electrical Solutions) LLP
08768452 Barlows Retail Limited
07706549 Blucon Limited
07268881 Build4me Limited
06746083 Byyd tech Limited
08257527 Cable Power Limited
07988462 CM One Ltd
01494452 Computer Remarketing Services Ltd
05465993 Concorde Solutions Ltd
03271609 Concrete Media Ltd
07782581 Crafts Bargain Corner Ltd
08502710 Critical Resource Ltd
07632876 Direct Office Contracts Ltd
04220936 Deamtek Ltd
08863706 East Midlands Energy Services Ltd
08016588 Elimco UK Ltd
08881132 Est Renewables Ltd
04452584 Focus Scaffolding Ltd
07331792 Freedom Renewables Ltd – In Administration
05487099 Golf Bookers Ltd
03907607 Gradweb Ltd
07003407 Greenbuy Energy Ltd – In Liquidation
04849603 Greencyc Ltd
08295766 Greenoke Energy Ltd – In Liquidation
05698290 Gyrocom Ltd
07646296 HeadsGRP Ltd
06936063 Hooper Productions Ltd
07373180 Ice Academy Global Ltd
02939105 Ice Energy Heat Pumps Ltd
05136537 IHS Corporation Ltd
08136988 Insulation NE Ltd
04731727 ITS Projects Ltd
04349192 LCC Deployment Services UK Ltd
04708094 Maynards Electrical Contractors Ltd
03713679 McKinney Rogers International Ltd
07109707 MP Energy Ltd
03848698 Osprea Logistics Ltd
07556396 Patchez Ltd
06060169 Peerius Ltd
03135186 Phoenix Electrical Engineering Services Ltd
05367566 Pixel Projects Ltd
SC327304 Prater Contracts Ltd
06619874 Property & Training Solutions Ltd – In Liquidation
03000135 Ralph Coleman International Ltd
08067061 Rebel Minds Ltd
06741422 Reconsulting RTC Ltd
04933736 Resorthoppa UK Ltd
03402188 RNR London Ltd
08667253 SIS Digital Media Ltd
06894877 Site One Ltd
07437386 Somo Custom Ltd
06860380 Somo Ltd
07419084 Specific Heat (London) Ltd
07774640 Swiss Bullion Ltd – currently subject of winding up petition
08327554 Synchro Software Ltd
SC355209 Taylor Hopkinson Ltd
08214283 Tesla Energy Services – In Liquidation
05896266 The Knowledge Engineers Network Ltd
08236274 Threen Site Services Ltd
06761659 Trendstream Ltd
07250861 Twincentric Integration Ltd – currently subject of winding up petition
07326023 UK Room (London) Ltd
05711612 Woods Environmental (Leeds) Ltd

That’s quite a lengthy list for a company that allegedly don’t take debentures and I sincerely hope that all of the many factoring companies and brokers reading this aren’t going to “do a Market Invoice” and approach them all to try and pitch them to change providers but if they did I suppose that it would simply be a case of karma.

I recently expressed concerns in another blog post that perhaps due diligence on debts put forward for funding to internet invoice discounting companies was either not done or was inadequate and that fingers might be burnt as a consequence. If a normal factoring company funds debts that aren’t recoverable for any reason they stand to lose money but in the Market Invoice business model it’s the online investors that stand to lose money if a debt is irrecoverable and a look at the documents filed by the Administrator of Freedom Renewables Ltd at Companies House show what a dicey business it can be if the proper homework isn’t done as it seems that one or more invoices issued by the company that were funded to the value of £633,790 are the subject of dispute by the customer and the remaining non factored invoices which probably come under the terms of the floating charge seem to be a bag of brown stuff too.

Links

Statement of Administrators Proposals

Notice of Statement of Affairs