Factoring Blog » Close Invoice Finance

Factoring Blog review of the first half of 2009 part two

Ian — Thu, 25 Jun 2009 07:51:52 +0000

Factoring charges in the past have been driven down and down as one or two of the major bank owned factors have tried to buy market share at any cost. The activities of an internet lead generator with an automated online pricing model hasn’t helped as any such thing must be price driven thus driving prices down even further and the factors have tried to redress this by looking at other ways of increasing revenue rather than affect their headline rates. To this end we have seen the introduction of facility commissions which is a percentage of the agreed facility and is addition to the factoring commission. At least one of the big bank owned factors is now incorporating renewal commissions too if the poor client wishes to renew his facility at the end of the year whilst the worst one of the lot has been sneaked in by one of the big boys who has stuck in a termination fee which becomes payable if the client wishes to terminate his facility whatever the reason whatever the time.

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.

Close Invoice Finance closing offices to cut costs

Ian — Tue, 28 Apr 2009 14:48:26 +0000

Was it just a year ago that Close Invoice Finance opened their Birmingham operational centre in a blaze of publicity. No doubt there will be far less publicity now that they have decided to close it with the inevitable redundancies.

In an effort to slash costs we hear that the Manchester operation centre is also being closed with the decision being taken in the same month as the announcement that Ian Steward had been appointed Managing Director of Close Invoice Finance in the North.

We’re not quite sure what he is Managing Director of now

Another one bites the dust at Close Invoice Finance

Ian — Sun, 29 Mar 2009 09:16:30 +0000

We were approached last week by a company who had only been factoring with Close Invoice Finance for two or three weeks but had already run into serious problems and wanted us to find them an alternative factoring company.

The company that we introduced realising the urgency of the situation did their fact finding visit straight away and discovered that there had been breaches of the factoring agreement but sensing that the underlying business was sound they decided to put the deal forward for approval by the credit commitee which was due to meet on Monday 30th March in order to approve the offer of a facility.

Unfortunately Close couldn’t wait one working day and appointed an Administrator on Friday 27th March. It’s quite a sad state of affairs as we thought that the business was salvageable but no doubt by the time the factoring company has charged a load of extra fees and the Administrator has had his whack there won’t be anything left for anyone.

This isn’t the first story that we’ve heard about the ultra hard line being taken by this particular factoring company since the new MD took over and whereas once upon a time they used to have a fine reputation for service they are no longer on our approved list and haven’t been for some time.

Close Invoice Finance shows up Bank of Scotland

Ian — Fri, 21 Nov 2008 08:39:16 +0000

By the purest of co-incidence we have been approached by a company who had a factoring facility with Close plus a trade finance facility with Fairfax Gerrard. It would seem that the trade finance company have cash flow problems of their own and their inability to continue to provide trade finance has put a lot of financial pressure on the company. Judging by other telephone calls that we have received this company is not the only one suffering due to their relationship with Fairfax.

We put it to the company that whilst we could possibly source a replacement trade finance facility they would also want the factoring too as that would be their security and were told that this had already been discussed with Close who would reluctantly release the company from it’s factoring facility as it would be in the best interests of the company.

It’s good to see that in this day and age there are still companies that will “do the right thing” so plaudits to Close Invoice Finance who have shown up Bank of Scotland for the greedy concern that they are.

Ian

http://www.tradefinance-uk.co.uk

Factoring company of the year is…..

Ian — Sat, 15 Nov 2008 13:44:34 +0000

Almost all of them.

We were approached by a company last week that was looking for a factoring facility and having read our website they were interested in our recommendations. The MD mentioned that he had already approached Cattles Invoice Finance on the basis that they were award winners to which my response was that almost all factoring companies were award winners somewhere or another.

Looking at the factoring and invoice discounting companies’ website I noticed that Cattles were proudly proclaiming to have won the Business Innovation of the Year award at the National Business Awards’ North West regional finals.

Moving onto Close Invoice Finance and they are claiming the Business Moneyfacts Best Factoring and Invoice Discounting Provider award for the third year running whilst Venture Finance are the winners of the Credit Today Factor Discounter of the Year for the second year running.

Perhaps the most amusing website is that of Bibby Factors where they are proud of the fact that they were voted best factor and discounter by NACFB 2003 2004 2005 2006 thus prompting the question “What happened in 2007 then”

In addition to the above I went to the annual Dealmakers Dinner late last year which included an awards ceremony and GE Commercial Finance managed to win the Dealmakers Asset Based Lending award of the year.

I have no doubt that the clearing bank factors have also won a shelf full of awards between them as I seem to recall that Lloyds TSB was the victor at the Dealmakers Dinner in the previous year.

Oddly enough we introduced the prospective client that started me thinking about awards to one of the few factoring companies that doesn’t seem to have won an award at all even though they consistantly offer an above average service at competitive rates.