I was rather concerned when I read the press release about the recent sale of IGF Invoice Finance as it was using phrases such as “Spring Ventures, a private equity investor specialising in management buyouts of UK companies with strong growth potential, today announced that it has backed a group of experienced commercial lending professionals to buy…..”
I am old fashioned enough to prefer factoring companies that are run by factoring professionals and not commercial lending people as the disciplines are completely different and recent history have seen factoring companies going backwards after having been acquired by “experienced commercial lending professionals”.
We have already seen one of my previously preferred factoring companies SME Invoice Finance taken over by a bank only to lose it’s soul and turn into yet another bank owned sausage machine that says one thing and does another.
Ultimate Finance used to be high on my preferred list of factoring companies but is another that once taken over lost most of it’s senior factoring personnel to be run by money boys, one of whom recently stated that he wasn’t happy paying introductory commissions to brokers and thought it would be more profitable to cut out intermediaries.
To a company that relies almost exclusively on introducer lead new business that comment made about as much sense as suggesting that they get rid of all the staff to save on wage costs.
IGF Invoice Finance is an interesting company with a chequered history as many years ago they had an excellent reputation for their service levels which was ruined at a stroke when they introduced a new computer system without testing it properly and without running it in parallel with their existing system as it failed to work as expected resulting in their clients scrambling to find alternative factoring arrangements.
As if that wasn’t enough they decided to expand by taking over another factoring company with Dynamic being the recipient of their affections. Unfortunately Dynamic were less than enthusiastic about being taken over so refused access to their books whereupon instead of doing the sensible thing and looking for another target IGF launched a hostile bid without doing due diligence resulting in them managing to buy the company and subsequently finding that the debtor book they had acquired was of a lower quality than they expected (that’s me being diplomatic)
Having committed two cardinal errors IGF brought in a completely new management team that has managed to work through the problems caused and for the last few years has earned a reputation as a well run company with a good reputation for service levels.
Let’s hope that this situation continues but I do find it a major concern that the press release is full of details about the new commercial finance boys that will be involved in the running of the company but has absolutely no mention of the existing management team that have given IGF the reputation that it has in the market today.