invoicefactoringnow.net – beware

This morning I received yet another email addressed to Factoring Solutions telling me some of the benefits of factoring and how it could improve my working capital but this time inviting me to contact invoicefactoringnow.net for a quote.

Naturally my curiosity was aroused so I had a look at their website and found that it was just a single page and contained no details at all of either the name or address of the website owners but invited me to fill in a form which would allegedly result in me receiving some quotes for factoring.

time for cautionI checked out the ownership of the website to find that it had been registered four months ago but the ownership was hidden behind a nominee in Panama (just like the last one) which normally implies that they have something to hide. The website is also hosted in USA which is unusual for a company supposedly trading in the UK and what is even more curious is that hidden away in the website coding is the telephone number 1 973-917-8002 which is obviously not a UK number.

Hopefully no-one receiving an email suggesting that they apply for a factoring quote would be stupid enough to do so on a website that contained absolutely no details about who they were applying to with no name, address or telephone number on the website and again hopefully any potential applicants will check them out on Google first and with a bit of luck will come across this blog post.

 

It’s that time of the year again

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 😀

 

 

Payroll finance problems at Lloyds?

Rumours have surfaced that all is not well at the payroll finance division of Lloyds Bank Commercial Finance as we hear that the back office administration was outsourced to a third party which has resulted in what was described to the Factoring Blog as “an unholy mess” with invoices not being sent out to customers at all for six weeks plus other administrative mess ups resulting in quite a few very unhappy clients.

One factoring company’s telephone hasn’t stopped ringing with unhappy clients wishing to transfer away from Lloyds and they have already taken on a few of their recruitment clients with a few more in the pipeline and that’s just the one factoring company.

If any of the recruitment finance clients of Lloyds are unhappy with the service levels please don’t hesitate to contact us and we can very quickly introduce you to a factoring company that will offer a first class factoring and back office facility that won’t let you down

 

Factoring critics don’t like being criticized

I’m not a great user of Twitter and although I use an automated program to repost blog posts from both here and my website to Twitter I don’t very often actually log in to read tweets by others.

I did log in this morning and had a quick read of some of the self promotion from the people that I follow and noticed that the scourge of the factoring industry Brian Moore had been very quiet lately so searched on his name to find his last tweet only to be met with the words “You are blocked from following @rabf_ and viewing @rabf_’s Tweets”

Having patiently read his tweets over the years which normally comprise phrases like “We are closing in on a big expose” without ever commenting I finally did comment on a couple of his tweets at the tail end of last year.

In early November we had the following exchange with my initial comment being rather obviously tongue in cheek

Asset Based Finance @rabf

Visting the  fpshow2014 remember the factoring business invoice finance is totally unregulated & open to fraud

Factoring Blog

That’s certainly true as it’s surprising quite how many companies try and defraud their factoring company

Asset Based Finance @rabf

Difference is that no expects their factoring company to be a fraudster signing clients to bust them

Factoring Blog

You’ve been mud slinging for two or three years now but in that time have you actually produced one genuine case?

 

Round two started later in November when Brian decided to put his own spin on a media report completely distorting it in the process

Asset Based Finance @rabf

“toxic” and “aggressive” culture inside banks led 2 fraud in factoring finance industry take generation to change

Factoring Blog

There is no mention at all of the factoring industry in the report so please don’t put a spin on the report that isn’t true at all.

Asset Based Finance @rabf

Let me get this right a £300bn unregulated asset based finance industry has had no fraud no criminal acts Yer Right

Factoring Blog

Maybe or maybe not but that was not what the report was about and you were just adding your own bias to it

Asset Based Finance @rabf

Yes you are right the banks created factoring divisons outside the PRA so that commit fraud #Lloyds

Factoring Blog

The banks actually created their factoring divisions 50 years ago before all of this regulatory stuff existed.

 

It seems that like many cyber bullies Brian is quite happy to use the world wide web to rubbish the factoring industry but even the mildest of criticism isn’t to be tolerated and results in his critic being barred from access to his tweets

Factoring and invoice discounting in 2014

2014 has been another difficult year for the factoring industry showing very little growth in terms of client numbers with the 6,669 new clients taken on in the first nine months of the year being almost completely negated by the 6,397 lost in the same period.

The statistics provided by ABFA show that the 43,708 companies using factoring and invoice discounting as at 30th September 2014 were using £19.3 billion of funding which was an increase of 12% on the previous year’s funding levels.

The trouble is that we don’t know the reasons behind the increase in funding levels. It would be good to think that the companies needed higher levels of funding as they were selling more but it is equally possible that companies that were not fully utilizing their facilities in previous years had upped their cash requirements due to poor trading

82% of the total client numbers are companies turning over £5m or less and their numbers actually declined by 109 companies but the remaining 35,600 companies in this sector increased their funding levels over the previous year but as always the figures are skewed by the inclusion of the 700 companies turning over in excess of £50m pa meaning that 1.7% of the total number of companies were responsible for 39.9% of the total funding thus making many of the overall statistics meaningless.

Leaving published statistics aside almost all factoring insiders are complaining about the lack of activity in the market and have done so for most of the year with most of the factoring companies and brokers feeling the pinch.

Against this backdrop we have seen yet more factoring companies setting up with Richard Pepler launching HH Cashflow Finance as part of the Henry Howard Finance Group, Arbuthnot have either launched or are about to launch a new factoring subsidiary of their Secure Trust Bank subsidiary and there is at least one senior factoring executive doing something under the radar although I haven’t heard any rumours yet.

2014 has probably been the year when alternative forms of invoice finance began to take more of a hold – at least in the public’s imagination if not in hardcore lending. The market leaders are those masters of self promotion Market Invoice whilst rumours abound that one of their competitors are finding life difficult and I must admit that I watch this market sector carefully as I am very dubious about any form of invoice finance that takes place without debentures, personal guarantees or most importantly, due diligence

From a more personal point of view Factoring Solutions haven’t managed to buck the trend and we have seen a reduction of about one third in the number of enquiries received throughout year although the conversion rate has been higher so the net number of companies taken on will end up similar to last year which is a positive sign.

I apologize that the updates have been somewhat scarce this year but in all honesty there hasn’t been that much to write about and although there are interesting things going on in the background much of what I am told is in confidence and therefore cannot be published.

May I finish by wishing Seasons Greetings to all readers of this blog and hope that we all have a prosperous New Year

 

 

Factoring brokers – caveat emptor

My interest was aroused a couple of months ago when I received an email from Jasmine Tait at InvoiceBackup.co.uk telling me all about the wonders of factoring and asking whether I would be interested in factoring my debts.

I had a look at their website in which they claimed to be established factoring brokers dealing with such well known factoring companies as Touch Financial and Invoice Finance Village and I bookmarked the site intending to do some further investigations only to find that the website had disappeared.

A couple of weeks ago I received another email, this time purporting to be from Madeline Walters of invoiceadvisors.net again asking if I would like to factor my debts.

Once again I did some research to find that this allegedly well established broker’s website had only been registered two weeks prior to the email being received but the owner must have been a bit shy as the domain was registered in the name of a nominee in Panama.

The website itself looked fairly professional and the company allegedly had relationships with a few factoring companies including Hitachi (which I doubt) but rather than investigate immediately I put it to one side until today.

As with the first site this one has now disappeared and the telephone number is unobtainable.

I’m not sure what is going on here but whatever it is can’t be healthy and it’s difficult enough as it is for the poor prospect to know whether he’s getting sound advice or not from his broker without people like this muddying the waters.

On a slightly related matter I came across someone on an internet forum asking whether anyone could recommend a decent, honest and reliable factoring company and I responded that I could and suggested that he contact me to discuss the various options that might be open to him.

Up popped someone whom I had never heard of who’s forum signature suggested that he offered “Accountancy, Book-keeping, payroll, Specailist Pub Accountant ,IT solutions, Free Factoring Service” (his spelling not mine) saying that he had a relationship with a factoring company that would quote 10% cheaper than anyone else.

I dread to think who this might be but checking again with Nominet shows his domain name to have been registered just one week ago.

At least in this instance I think that the chap is genuine even if a bit of a jack of all trades and the individual who asked for advice said that he would telephone both of us.

I will evaluate the business and introduce him to the most appropriate factoring company for his needs whereas “Jack” has probably already decided that this is one for his discount buddy

New TV star from the world of factoring

On ITV2 is a reality TV show called Bad Bridesmaids and tonight’s episode at 9:00pm features one of our very own making a fool of herself showing the world that the acting profession’s loss is factoring’s gain.

I fear that Emily won’t be long for the world of commercial finance if any Hollywood casting agents are watching but at least in years to come when I’m watching her starring in the latest Michael Bay Blockbuster I can take pride in the fact that she once bought me lunch 😀

Emily

 

 

Arbuthnot to have yet another crack at factoring

According to media reports Arbuthnot wish to break into the SME market to “take advantage of big banks’ reluctance to lend to small businesses” and their forthcoming entry into an already overcrowded invoice finance market is one of the ways in which they hope to capitalize on this.

If my memory serves me correctly this will be their third attempt at the factoring market and one has to hope that this latest incarnation will be more successful than the last one.

I seem to recall that Arbuthnot Latham Factors was one of earliest non high street bank factors and one of my colleagues left the company that we then worked at in the late sixties to join them on the South Coast as that was closer to his home than our Croydon office.

Unfortunately I don’t recall what happened to the company but the bank decided to have another crack at factoring and set up Arbuthnot Commercial Services in 1994  but 14 years later that found itself with a few problems and was sold to Bibby where I guess it was absorbed into Bibby’s Southern office.

At a time when the independent sector are working hard to stand still it’s not really the best time to launch yet another provider as the market is already saturated but I wish them the best of luck anyway and hope that it’s third time lucky

New factoring statistics show flat market for the SME sector

The ABFA released statistics for factoring and invoice discounting in the first quarter of 2014 last week accompanied by a press release claiming that it had been a “record year for asset based finance as businesses step up borrowing against invoices to fund growth” and “Invoice finance shows 29 per cent growth since 2009/10”

Whilst I’m sure these statistics are accurate they are not a reflection of the factoring industry as relating to the SME sector because as usual the figures and resultant statistics are heavily skewed by the inclusion of companies with sales in excess of £50m per annum.

More pertinent statistics relating to the SME sector of companies with annual sales up to £10m per annum show that the net number of companies using factoring and invoice discounting in 2013 rose from 39,292 to 39,402 a magnificent net increase of just 110 companies.

Moreover the advances to these companies at the end of 2013 were also at a similar level to the end of 2012.

The biggest growth area in terms of advances seems to have been to companies with annual sales in excess of £50m with the 713 companies falling into that sector responsible for a whopping 40% of the total advances made.

Another pertinent statistic is that the net gain of 110 companies using these facilities is made up of 9,126 new companies less 8,762 who for one reason or another ceased factoring which is considerably worse than in the preceding two years.

Client numbers for the first quarter of 2014 show the rather amazing statistic of 2,185 new clients counter balanced by exactly 2,185 lost clients.

I was rather amused by the comment made in the press release by Martin Morrin, Chairman of the ABFA, who said: “Invoice finance is playing a bigger role than ever in funding British businesses’ growth, and has truly stepped into the mainstream of business funding.”

“Since the credit crunch, invoice finance has become an even more important source for SMEs for funding as they struggled to access traditional term loans.”

For those that don’t know, Mr Morrin is the Managing Director of RBS Invoice Finance which is a subsidiary of Royal Bank of Scotland one of those very same high street banks that are proving so difficult to obtain traditional term loans from thus forcing their customers into factoring.

The ABFA press release also stated that “that many businesses do not realise that the invoices that they have outstanding with customers are often the most valuable asset owned by the business, and that banks and other funders will willingly lend against them.

Intriguingly the fact that so many companies were unaware of invoice finance was one of the topics raised at the recent ABFA conference which did make me smile as the factoring companies were chuntering about exactly the same thing forty years ago and I wouldn’t mind betting that it’s been raised and discussed many times in the intervening years.

I’ve come up with a novel suggestion – why don’t all of the factoring companies get together and fund a joint marketing effort to raise awareness of the industry and the benefits available to the SME sector.

On second thoughts it’s a silly suggestion as it’s far too radical 😀

Some factoring brokers aren’t very bright

On 11th February 2014 I posted an article about David Pollard whom I had spotted trading as a factoring broker – Milestone Funding out of Chesterfield and whose previous companies had been wound up in the public interest by the High Court for poor business practices following an investigation by the Insolvency Service.

A couple of weeks later the blog was visited by someone using the IP address 86.160.209.75 which resolved to an IP address in Chesterfield and this person visited the blog on a further 12 occasions seemingly only interested in the post about David Pollard and Milestone Funding and ignoring anything else on the blog

Shortly after that I started to get inundated with telephone calls from a variety of companies claiming that I had been on their website enquiring about telephone systems / PPI claims / water coolers and dozens of other things. Fortunately or unfortunately the bulk of the calls came in whilst I was in Spain on vacation and it was left to my colleague to fend off these callers.

Most of us grew out of childish tricks like that with puberty but obviously some people are just plain immature. They also don’t know much about the internet either otherwise they would know that every time you make an enquiry on a website it logs your IP address.

I’m sure that most people who have read down this far will have an inkling of what that IP address might be. Yes, it’s the very same 86.160.209.75 from Chesterfield that was so interested in my blog posts about Mr Pollard and his Chesterfield based company Milestone Funding.

Co-incidence? I’ll leave you to decide