When writing the text for Factoring Solutions website ten years ago in 1999 I added the quip that “many companies using invoice finance to speed up cash flow still find their factor by looking in Yellow Pages – which is surely why there are so many factors beginning with the letter A” and it gives me great pleasure that the powers that be at Cattles have heeded my words

I doubt whether many people use Yellow Pages any more but there are obviously web directories that list factoring companies in alphabetical order so Absolute will jump up the queue with their name change and regain the position that they had when they used to be known as Argent Commercial Services.

I wonder if anyone will now consider changing their name to Aardvark Factors to get pole position

Whilst the announcement is now “old news” it did come when I was away sunning myself in Cyprus and whilst I thought about writing something for the blog at the time the amount of effort required to research and write something via Blackberry was too much like hard work.

Having belatedly read the press release dated 10th August I was interested to read the comment attributed to Doug Crawford that “The invoice finance industry is enjoying unprecedented growth in the current financial climate………”

The statistics for the factoring industry issued by the ABFA for the last couple of quarters show that far from enjoying “unprecedented growth” the industry has seen a drop in value of sales factored as well as the number of clients availing themselves of the services but I now await with great interest the figures for the quarter ended 30th June (which should be available shortly) to see the official confirmation of this growth.

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.

Wageroller and Smart Flow Finance have bitten the dust although there are rumours that Wageroller has resurfaced under a new name but the only factoring company to have succumbed in the first quarter of the year has been Challenge Finance.

I started off the year by announcing that GMAC had pulled down the shutters for new business but I had a meeting with one of their regional directors yesterday who told me that they were now in full steam ahead mode and with quite an innovative range of ABL products too.

Even in a fast changing world like the one we currently live in there are some things that never change. At the end of last year I announced that the parent company of Cattles Invoice Finance were about to sell the company and that would happen “any day now”. Six months down the line the supposed sale of this factoring company is still just round the corner as the parent gets further and further into the mire with it’s negotiatons with bankers unresolved, it’s accounts delayed as the auditors won’t sign them off and the shares suspended. Still I’m sure that a Cattles insider will be contacting me shortly to let me know that the sale will be happening “any day now” as has been happening at monthly intervals throughout 2009 so far.

The other enigma is Close Invoice Finance which at one time was a market leader in terms of client satisfaction but where the stories of ill treatment from unhappy clients just seem to keep on coming. This year to add to the confusion Close have closed the operating centres in Birmingham and Manchester making a number of redundancies in the process in order to cut costs whilst at the same time employing an industry heavyweight on what must be a huge financial package to run what’s left of the Northern operation, as well as buying a small factoring operation in Northern Ireland.

My predictions for the second half of 2009 are to expect much of the same. The market will still be tough to operate with the well run independents riding out the storm without too much damage to either their reputation or bottom line but I think that the recession coupled with the tough attitude taken by the credit insurance market will start to see big problems in the top end of the invoice discounting sector with companies turning over in excess of £50m failing and possibly resulting in significant bad debt losses for the banks operating those facilities.

Time will tell.

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This time I took more time out to read the webage and there was a section entitled “Simply fill in this short form to receive our 1 minute guide to factoring”

So far so good but a drop down list gave a list of options and you are supposed to select the option which is the most relevant. The options are:-

1) Cashflow Issues

2) Want To Grow?

3) Buying Our Company

4) Buying a Company

5) Want New factor

I know that Cattles Invoice Finance must be getting desperate by now but surely advertising for a buyer on their own website isn’t the answer

Is this to be the new company name if the sale of the factoring company ever goes through or have the Cattles management decided to prepare to jump ship in case the continued stalling proves terminal.

According to the report the company is in breach of it’s banking covenants and is currently locked away in talks with it’s bankers in an effort to refinance the company and they are claiming that they are unable to finalise the accounts for the year ended 31st December 2008 until these talks are concluded.

One has to wonder how this announcement tallies with the announcement made just a couple of days ago that CIF were expanding their sales team where the regional managing director made the bold statement that “Despite many of our competitors freezing recruitment as a means to cut costs, we feel it is important to invest in talent because it plays such an integral part of driving growth and business development”

One has to wonder quite what the “talent” has made of today’s announcement

First off was an email from Skipton Business Finance by way of an introduction to the writer in which he stated that “There has been a lot of positive changes to personnel within SBF over the last 12 months which has lead us to achieve the ‘UK Factoring & Invoice Discounting Provider of the year award 2009’ at the ACQ Global Awards 2009″ I wasn’t quite sure how to take the bit about the fact that it was the positive changes to personnel that lead to the award as I’m not sure if it meant that they had got rid of the people that stopped them getting the award in the past or had employed a factoring superhero or two.

The second email was from Venture Finance to tell me that they had been voted winners yet again of a prestigious award but I’m afraid that I can’t remember which as I accidentally deleted the email.

The third was a slightly unusual press release as it was from Oriel Collections who were jumping the gun a bit as they hadn’t actually won anything but had been short listed for “Commercial Credit Team of the Year” in the Credit Today awards.

Interestingly enough one of the three companies mentioned above has a terrible reputation in the industry for service and Factoring Solutions has received quite a few enquiries from it’s disgruntled clients in the past but there again I don’t suppose that winning an award actually has much to do with service anyway.

The shortlist for “Factor & Discounter of the Year” for the Credit Today awards comprises the following luminaries – Ashley Commercial Finance, Bibby Financial Services, Cattles Invoice Finance,  HSBC Bank and Venture Finance. It makes me wonder how a company manages to get itself shortlisted for such an award. The staff and clients of Cattles haven’t known whether or not they were coming or going in the past few months whilst HSBC have been keeping selected brokers in champagne by offloading clients that they decided no longer fit their new criteria.

I will make the same comment that I made last time I wrote about silly season that the two factoring companies I use most of all have service levels far higher than most coupled with competitive pricing and unlike at least one of the factoring companies mentioned above are still actively looking for business yet neither of them has ever won diddly squat.

It’s a strange world

As if that wasn’t bad enough the shares in the parent company dived again last week as they had to issue a warning that their results would be delayed “pending completion of a review of the adequacy of its impairment provisions” which sounds to me rather like the auditors aren’t happy with the provisions.

Talking to one factoring company last week I was told that they were being inundated with CVs from employees from Cattles Invoice Finance which speaks volumes about staff morale.

I don’t suppose that they factored in the worsening climate for finance companies and banks at the time and the end of the year has now come and gone with no sign of any imminent announcement regarding the sale.

Rumours regarding the interest shown by Bank Santander have now gone quiet whilst we hear that Hitachi who were the recent favourites have also lost interest.

We have to repeat the advice that we gave in September that until the future is clear we cannot recommend Cattles to any of our clients.

Ian

Factoring Solutions