Factoring Blog News, views and gossip from the world of factoring and invoice discounting

Brian Nalborough the ex owner of Aston Rothbury Factors who laundered millions of pounds of tainted and stolen money has been jailed four years for his role as a banker to the criminal underworld.

It would seem that Nalborough is no stranger to prison having previously spent time in an Italian jail on charges of illegally supplying arms to Bosnia.

It would seem to be more than likely in the circumstances that some of that money ended up funding Aston Rothbury clients.

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It seems that having purchased a factoring company specialising in smaller and riskier clients Bank Santander now don’t want them and are giving them notice.

Having received an enquiry from the second Liquidity client within a week the factoring company that I passed them to said that they had also received several more through other channels.

One does wonder why on earth they bought this particular factoring company if that wasn’t the sector of the market that they wished to be in – it must have been the tax losses

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Bank Santander have entered the UK factoring market not with a bang but with a wimper. The Spanish banking giant has been sniffing around the many factoring companies for sale for some time and were rumoured to be the frontrunners to take over Cattles Invoice Finance until getting cold feet and have instead plumped for the little known Liquidity Ltd a small factoring outfit based in Birmingham.

I have always been very dubious of recommending any of my clients to Liquidity as it is run by the same person that used to be the Chief Executive of Euro Sales Finance until it was rescued by Royal Bank of Scotland in 2001. Prior to being taken over by the bank Euro Sales topped the league tables of independent factoring companies appointing Receivers to their clients.

In 1999 and 200 Euro Sales Finance accounted for one in five of all Receiverships appointed by independent factoring companies which was a horrifying statistic and one that has ensured that I never deal with any factoring company that has any of their old directors in a management position.

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“Ray Moore is the Managing Coach in the ActionCOACH Chelmsford office. He is an energetic and dynamic coach to both business owners and fellow coaches. In the words of one of his clients “Coaching is only as good as the coach! Ray Moore is an excellent coach.”

Ray trained as an accountant but he quickly realised his destiny lay in the cut and thrust of commercial life. His career has encompassed a wide range of industries including manufacturing, property, retail and distribution.

Over the past 14 years Ray has successfully built his own businesses. In May 2001, he sold his last £6million turnover business to a FTSE100 company for above sector PE ratio.”

The above is quoted directly from his own website but if anyone wants a look at this dynamic man’s website this link may be of interest:-

Does it seem at all familiar? Well it should to many of you as apart from a new six word title it is lifted word for word from my website. One would have thought that a company like Action Coach would have the resources to create their own text without having to resort to stealing mine .

Would you trust a company that is happy to steal the intellectual property of others. I know I wouldn’t

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The grapevine has been full of rumours about Venture Finance being the latest target of Deutche Bank’s attempt to break into the UK factoring market but it has recently come to the ears of the Factoring Blog that having got as far as due diligence they have suddenly lost interest as apparently they weren’t too keen on some of the structured lending deals that they looked at

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I have been approached by a company who complained about the service that they were receiving from their factoring company and who asked me to find them a replacement. It would seem that the factor was being very strict on concentration limits and wouldn’t fund more than £30,000 on their major customer whereas they were trading at £70,000 per month with them. When discussing the creditworthiness of the customer the chap told me that they would never not pay their bills as they were actually silent shareholders in his company.

There were three possible ways to play this as I could have tried to find him another factoring company without disclosing to them that the major debtor was an associate and earned myself a nice commission in the process or else I could have told him that no factoring company would take him on and fund an associated company if he came clean about it or I could have refused to handle the enquiry and have a quiet word with the factoring company.

It is a bit of a moral dilemma as prospective clients discuss their business with me in confidence and expect me to either find them a replacement factor or else to drop it completely but there again I would have a struggle with my conscience if I knew that a company was effectively defrauding a factoring company and I did nothing about it.

I struggled with my conscience for ten minutes then had a quiet word with someone at his factoring company and warned them

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One of my factoring buddies sent me the current edition of Business Money which to those that haven’t come across this august journal is a magazine apparently devoted to the factoring industry which says lots of nice things about all of the factoring companies and is funded by advertisements from them too. He seemed to be highly amused that the magazine had printed a dig at me

When skimming through it there were three paragraphs that caught my eye.

1) Business Money, over 16 years has always endeavoured to report hard commercial reality

2) The job of the media is to report facts, accompanied by comment given that the public cannot be sufficiently well-versed in every topic being reported on to place the news in context

3) The Cattles saga goes on, a situation calling for some sensitivity and not helped by one or two, who really do need to get out more, without their anoraks, and who seem to delight in creating as much anguish as they can for a great bunch of men and women who are just trying to do their job with something of a cloud over them.

The urban dictionary defines an “anorak” as someone “obsessively interested in a thing or topic that doesn’t seem to warrant such attention” so it would seem that because I have a problem with the fact that Cattles Invoice Finance are continuing to take on new staff and clients at a time when their parent company is struggling for survival I am an anorak that should get out more.

I’m quite sure that the friendship shown by Business Money towards Cattles Invoice Finance has nothing to do with the full page advert that appeared a few pages along in the same edition.

The Factoring Blog was set up partly because there is no media devoted to reporting “the hard commercial realities” within the factoring industry and there is much that needs to be said but unlike Business Money we can be objective because we don’t have to worry about biting the hand that feeds us.

Posted under Cattles Invoice Finance, Factoring

Ashley Commercial Finance have issued a press release which included the phrase “We have decided that in the current climate risk is more easily managed at the “small ticket” end of the factoring market and have therefore introduced a temporary funding cap of £50k for new business.”

We had heard rumours of funding restrictions being placed on clients and wonder whether this is connected with other rumours doing the rounds about substantial bad debt losses within their client portfolio.

There is a well known company within factoring circles whom no-one would touch with the proverbial bargepole but if rumours are to be believed Ashley unwisely took on a client connected with this company and are now suffering the consequences.

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We had an enquiry last November from a company who had a successful relationship with an independent factoring company but had been tempted away to one of the bank factors with talk of cheaper rates.

Within 3 months the unapproved debts had risen from £700 to over £40,000 and it became apparent that despite paying for a full credit control service the factoring company were actually not doing much at all so the cost of the facility had risen whilst the lack of cash flow due to the increase in unapproved debts was slowly strangling the life out of the company.

I introduced the company to one of the independents who are known for their excellent service levels and thought that would be the end of his nightmare but unfortunately that was not to be the case. The new factor was never able to buy out the investment of the bank factor as the lack of credit control had left the ledger in an unholy mess.

As the factoring facility was plainly not working the company stopped sending invoices to the factor and and has been struggling to self fund for the last few months. Speaking to them today it seems that the outstanding factored debts now total over £160,000 all of which is overdue and unapproved.

The company now wish to take legal proceedings against the factor for non performance on the basis that they paid them for a full sales ledger service including credit control that the factor has failed to provide.

Although a factoring agreement will be worded in such a way that the factor is not responsible for anything I’m sure that would not hold up in a court of law if it could be proven that they were negligent but has anyone successfully sued a factoring company for inadequate performance?

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Posted under Factoring, Factoring companies

Many people are catching onto the idea of blogging or article writing as a sales technique despite the fact that most search engine optimisers will tell you that the links have dubious value as Google will discount inbound links from the same source, especially if that source is also poorly rated.

I have read some very boring factoring blogs as most of them are just a rehash of the same article about how wonderful factoring is. This means that the blog has failed the first test which is that it must be readable and with the best will in the world no-one is going to return to a site where they keep rehashing the same article which is itself stuffed full of linked keywords.

There are some articles on factoring that are worth reading though and this morning I came across the following little gem:-

CONSTRUCTION INVOICE FACTORING BOOSTS CASH FLOW FOR BUILDERS IN TOUGH ECONOMY

Many builders and contractors are remaining dissolver by attractive plus of the justness that exists in their accounts receivable. Factoring cerebration invoices has embellish an primary factor of doing playing for some companies.

For more click the link…………

I wonder how many clicked the link to read the rest of it

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