Looking at the various brokers and factoring companies jockeying for position this morning there were two PPC ads that stood out for different reasons.

Firstly Cashflowuk who claimed that they were a “UK factoring broker with over 60 years experience.” Although that may sound appealing to anyone who knows nothing about factoring it is both meaningless and irrelevant as it could mean that they have one person who has been in the business for 60 years or else they have 60 trainees none of whom have been in the business for long.

I would guess that I am possibly the longest in the tooth of all factoring personnel as I’ve been in the factoring business for about 40 years but how relevant is that as the business has changed so much that any knowledge of market conditions prior to the last five years is probably irrelevant anyway.

Still, neither Cashflowuk nor myself are anywhere close to factoringcompare.com who make the bold claim on their website that “You benefit from our 100 years plus experience.” I wonder if they had to close down for the duration of World War 1 whilst they went away to fight in the trenches.

The second PPC ad to catch my eye was that of Close Invoice Finance as their strapline was that they were the “2010 Credit Today Winner” This is another of those “shoot yourself in the foot” straplines” that amused me in a previous post as the first thing that anybody who takes these awards seriously would do is to look up who was the 2011 Credit Today winner and approach Hitachi Capital Invoice Finance instead.

The only other PPC ads that caught my eye were from Bibby plus Close’s second ad as they were both headed “Factoring Solutions.”  Thanks Guys

Whilst Bibby and Close have just used my company name in their headline the Factoring Solutions award for plagiarism goes to firstfactoruk.com whose website meta description uses the phrase “We know which factoring companies deliver”.  Hmmm I’m sure I’ve seen that strapline somewhere before

Whilst the above are nothing really more than amusing, the growth of the internet has seen a huge rise in misleading websites and once I have done a little more research I will post again about misleading websites including the “broker” who has a glowing testimonial from a satisfied client who according to Nominet actually owns the website in question – but that’s for another day

The prospect chose their own insolvency practitioner who promptly got another factoring company involved on the basis that he wouldn’t receive any commission from a deal that he hadn’t introduced.

Unethical?   Just a bit

As the client was struggling to operate on the new reduced funding levels the obvious next step was to transfer to a more flexible factoring company but they were told in no uncertain terms that if they did they wouldn’t pay out on the bad debt.

It would seem that this same well known name also claims that if any of their clients becomes insolvent and enters into a CVA or Administration, that also invalidates any bad debts that are still in the system.

To my mind this is highly unethical as I’m sure the same people that thought that one up would be the first to complain if they had a motor insurance claim and the insurers said that they wouldn’t honour it if they transferred to a new insurance company on renewal date.

“we are the SECOND BEST INVOICE FINANCE COMPANY IN THE UK.”

So, anyone satisfied with second best should contact Ashley but everyone else should contact me

According to the ABFA statistics the total number of companies using factoring and invoice discounting at the end of September was 41,572 which was a net increase of 61 since 1st January.

Interestingly the factoring industry took on 8,000 new clients in the period but lost a similar amount. It’s normal that quite a few of the new factoring clients are phoenix’s of existing clients but my understanding is that less and less companies have risen from the ashes this year.

Stats for the final quarter of the year won’t be out for a few months yet but chatting to other brokers as well as factoring companies it seems that the final quarter has been even more of a struggle with enquiries down and companies taking longer and longer to decide what they want to do anyway.

Over at Factoring Solutions we aren’t bucking the trend with our enquiry levels down on last year but oddly enough we have had quite a good year as the quality of enquiry has been higher and we are getting a higher proportion of deals away even if the lead time is getting longer and longer. In November two different factoring companies both paid away decent deals that first arrived on the scene 18 months ago before prevaricating like mad for a year and a half and finally signing on the dotted line when we had all but given up on them.

I am frequently asked why I haven’t blogged as much this year and the honest answer is that there has been very little to blog about. No factoring companies have gone bust, no new ones have started up and there isn’t much tittle tattle to write about. I notice that a few of my broking competitors have now started to blog but with the best will in the world their efforts seem to be designed to try and boost Google rankings rather than to be read by human beings as the articles seem to be the same “what is factoring” article rehashed every month whereas this blog is actually designed to be read by factoring people and I won’t post just for the sake of it.

There are one of two stories that I have deliberately not run with as most industry insiders already know about them whilst I can’t see it being in the public interest to bring them to a wider audience and to those readers who email me complaining that I haven’t published their responses I would remind you that this is a personal blog and not a forum.

There is just the one rumour lingering that has been around for the best part of the year concerning the supposed take-over of one particular factoring company and I have been told in the strictest of confidence from several sources that the buyer is – a different company each time

The local head of Close stated that “If businesses aren’t prepared for the worst, it can have a serious effect on cashflow which everyone knows is the lifeblood of all businesses.

“The key for getting through one of the worst winters we’ve seen for years is preparation. Failing to plan could have a serious impact on your business and result in it being unable to trade.”

He went on to state that his “advice to businesses would be to have in place suitable funding arrangements to ride out any potential cashflow problems associated with the weather. Invoice finance is one option. It enables businesses to access cash immediately, easing any financial pressure and allowing companies to get on with what they do best – running their business.”

So now we know, if it looks like it’s going to snow, contact your friendly factoring broker and get your factoring facility in place before it has time to settle.

The overall number of companies using either factoring or invoice discounting has grown by the magnificent sum of 61 since the beginning of the year to 41,572 but lending to those companies has increased by £1 billion in the same period to £16 billion. Interestingly 62% of that increase in funding has come from the £10m to £50m turnover sector and 29% of the increase in the £50m to £100m turnover band.

Whilst total facility limits are shown as well as the total of advances made there is no analysis of how this is split into turnover bands and my guess is that rather than SME’s not taking their full available funding as ABFA like to claim it is actually a few of the £100m turnoevr companies that are skewing the statistics

There were a few similarities between the two dinners as the food was again naff, Bibby again won the factoring company of the year award and my name was again misspelled. However, unlike in June when the “comedian” had us all groaning the NACFB had spent a little more and Simon Evans had most of us in stitches.

I had to wait until this morning to see who else was there that I might have missed as NACFB in their infinite wisdom had printed the list of attendees in black on a dark blue background and judging by the number of people staring intently at the list I wasn’t the only one who couldn’t read it.

The evening was sponsored by Aldermore who had also been nominated for six of the first seven awards categories and it was somewhat embarrassing when they were overlooked for commercial mortgage provider of the year, lessor of the year, factoring company of the year, buy to let mortgage provider of the year and short term funder of the year but at long last their investment was rewarded when they won the specialist lender of the year category.

I’m intrigued to know what that covers though as it obviously doesn’t include commercial or buy to let mortgages, leasing, factoring or short term funding.

The grand prize draw had tickets to the Olympic rowing finals and signed Mancheter United shirts on offer but Aldermore got their own back with the bulk of the “winners” coming away with Aldermore Goody Bags and fixed smiles.

Once again many thanks to mine hosts for an entertaining evening.

I wonder where they are placing this increase in business as all of the factoring companies that I have been talking to say that new business is flat at the moment whilst the broking community are all looking a bit glum too. Even the ABFA try and put a positive spin on figures that show a constant decline in numbers of SME businesses taking advantage of the various forms of invoice finance.

I have always taken the view that if I have nothing to say, I say nothing – perhaps that’s where I’m going wrong

The ABFA claim that “UK and Irish firms are increasingly opting for this type of finance over other forms of lending” yet according to their own statistics 48,172 companies used factoring or invoice discounting at the end of 2008 – a figure which has fallen to 41,486 by 30th June 2011

They further claim that “The latest figures also show invoice finance clients are again choosing not to access all of the funds available to them. Total available funds this quarter were £22.2bn, with £6.5bn of finance available but not drawn.”

Nobody who I have spoken to believes that the majority of clients are “choosing not to access all of the funds available to them” but the truth is more likely to be that the figures are rendered completely meaningless by the 496 companies with annual turnovers in excess of £50m who represent 1.2% of clients by number but one third of factored turnover.

The reality is that as far as the SME sector is concerned the factoring companies are pedaling hard to stand still and have been for a few years since the start of the recession