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

It’s been quite a busy year with several small factoring companies either going bust or being taken over or both and with all existing factors finding it tough going.

I would imagine 2010 to see much of the same with one factoring company about to be taken over which I guess will be the first of several in the coming year.

However tough the market there never seems to be a shortage of people clamouring to get into it. Whilst some do it as they need to provide themselves with an income and they see the setting up and running a factoring company as the route to do that others have a genuine desire to be in the business. Santander comes into the latter category and with many of the country’s best loved names now part of the group one can hardly blame them even if they chose a most unusual way of doing so. There is also another new factoring company to be launched shortly which I have no doubt should be successful as there are no pressures there to take on business at all costs as seems to be the case with several of the more recent newcomers.

One of my hobby horses over the year has been the plethora of awards handed out to all and sundry with almost everyone being able to claim some sort of award for being the best factoring and discounting company of the year and as if to round off the year nicely a press release landed on the blog’s desk from Business Moneyfacts announcing a forthcoming event to “celebrate the best products and service in the business and commercial finance world”

The nominations for “Best Factoring & Invoice Discounting Provider” are:-

Absolute Invoice Finance
Bibby Financial Services
Close Invoice Finance Limited
Credit Agricole Commercial Finance
IGF Invoice Finance Limited
Venture Finance PLC

I have no idea who decides on the nominations or even how much they know about the marketplace but it always seems to be the same old companies that are nominated and the one thing that most have in common is their love of self promotion.

Of this year’s nominations Absolute Invoice Finance and their clients must have wondered if they would see out the end of the year as the previous parent Cattles were in such a parlous state whilst Close and Venture seem between them to be responsible for a disproportionate amount of the complaints that one regularly reads about on forums and blogs around the country.

IGF Invoice Finance is a company that has been top of many people’s lists of “who won’t be around this time next year” for the last two years and there are still mutterings in the marketplace about them.

That leaves just Bibby and what was Eurofactor and I freely admit that I don’t know much about the latter.

I wonder why these companies don’t approach me for a list of nominations

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Posted under Absolute Invoice Finance, Bibby Factors, Factoring companies, IGF Invoice Finance, Venture Finance

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

Posted under Factoring

A couple of months ago there was a rather “interesting” factoring case doing the rounds being a restart of a printing company that had gone bust defrauding Lloyds TSB in the process with loads of fresh air invoicing and as one would expect it was declined by all of the established factoring companies.

Much to my surprise I heard that this challenge had been taken up three weeks ago by one of the new kids on the block with a funding limit of £250,000

I have since heard that the factoring company are not happy with this partnership and are trying to unload it already giving the reason that they can’t offer more than £250,000 and the company really needs more than that.

The printing company obviously think that the more brokers they put it to increases the likelihood of finding a mug factor to take them on as there are currently at least two of the highest profile factoring brokers touting this around using the line that “this is a good little deal”

Neither broker is incompetent so they must be aware that all is not well with this particular deal and are hoping that the factoring companies that they are asking to look at this are too dumb to notice but that probably won’t be the case and the brokers will end up with their reputations tarnished whilst the new kids on the block will be keeping their fingers tightly crossed that they aren’t going to go the way of their predecessors already

Posted under Factoring companies

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.

Posted under Factoring

Venture Finance are heavily into self promotion and it seems like every time they sign a client a press release does the rounds. The latest to hit the circuit was earlier this week when they announced that “its Q3 results for 2009 are the best it has achieved in a decade. The independent invoice and asset-based lender has provided consistent support to UK businesses, in what has been a difficult time for liquidity. As a result, Venture has witnessed a 42% increase in new clients above the usual third quarter average, dating back to 2000.”

Th company’s staff must be wondering quite what to make of this announcement as they had just been called to a staff meeting during which they were told that the company was looking for volunteers for redundancy as 20 staff were to be chopped.

Posted under Venture Finance

“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

Posted under Factoring

I had a call this morning from someone who having read my website and blog wanted to check that the factoring company that they were about to sign up with were OK.

Chatting to the prospect it turns out that he had used a well known high profile “broker” who had supplied him with a list of factoring companies for him to contact including Bibby, Lloyds TSB, Hitachi and two others whose names he had forgotten.

I was rather surprised as I thought that the whole idea of using a broker was for them to source the best deal for the company and not just to give them a list of companies with no added value at all and I doubt whether the factoring companies themselves will work hard to win a deal and offer the most competitive terms if they are aware that every time they get a lead from this “broker” that half a dozen others have also touched it.

Posted under factoring brokers

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

Posted under Factoring

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

Posted under Factoring

It has now been confirmed that the factoring book of GMAC Commercial Finance has been put up for sale as the parent company looks to pull out of UK operations entirely.

This is rather sad as those of us who have been around a while will know that this company started life as International Factors which was a subsidiary of the then Lloyds Bank and was regarded at the time as the market leader as well as a leading innovater. Lloyds Bank also had another factoring subsidiary in the rather down market Alex Lawrie Factors and it was decided to keep this company and sell off International Factors thus starting the downward spiral from market leader to the relatively unknown that it is today.

It would be ironic if the assets were bought by Lloyds TSB thus completing the circle.

Posted under Factoring companies, GMAC Commercial Finance