Ian

According to media reports Arbuthnot wish to break into the SME market to “take advantage of big banks’ reluctance to lend to small businesses” and their forthcoming entry into an already overcrowded invoice finance market is one of the ways in which they hope to capitalize on this.

If my memory serves me correctly this will be their third attempt at the factoring market and one has to hope that this latest incarnation will be more successful than the last one.

I seem to recall that Arbuthnot Latham Factors was one of earliest non high street bank factors and one of my colleagues left the company that we then worked at in the late sixties to join them on the South Coast as that was closer to his home than our Croydon office.

Unfortunately I don’t recall what happened to the company but the bank decided to have another crack at factoring and set up Arbuthnot Commercial Services in 1994  but 14 years later that found itself with a few problems and was sold to Bibby where I guess it was absorbed into Bibby’s Southern office.

At a time when the independent sector are working hard to stand still it’s not really the best time to launch yet another provider as the market is already saturated but I wish them the best of luck anyway and hope that it’s third time lucky

The ABFA released statistics for factoring and invoice discounting in the first quarter of 2014 last week accompanied by a press release claiming that it had been a “record year for asset based finance as businesses step up borrowing against invoices to fund growth” and “Invoice finance shows 29 per cent growth since 2009/10”

Whilst I’m sure these statistics are accurate they are not a reflection of the factoring industry as relating to the SME sector because as usual the figures and resultant statistics are heavily skewed by the inclusion of companies with sales in excess of £50m per annum.

More pertinent statistics relating to the SME sector of companies with annual sales up to £10m per annum show that the net number of companies using factoring and invoice discounting in 2013 rose from 39,292 to 39,402 a magnificent net increase of just 110 companies.

Moreover the advances to these companies at the end of 2013 were also at a similar level to the end of 2012.

The biggest growth area in terms of advances seems to have been to companies with annual sales in excess of £50m with the 713 companies falling into that sector responsible for a whopping 40% of the total advances made.

Another pertinent statistic is that the net gain of 110 companies using these facilities is made up of 9,126 new companies less 8,762 who for one reason or another ceased factoring which is considerably worse than in the preceding two years.

Client numbers for the first quarter of 2014 show the rather amazing statistic of 2,185 new clients counter balanced by exactly 2,185 lost clients.

I was rather amused by the comment made in the press release by Martin Morrin, Chairman of the ABFA, who said: “Invoice finance is playing a bigger role than ever in funding British businesses’ growth, and has truly stepped into the mainstream of business funding.”

“Since the credit crunch, invoice finance has become an even more important source for SMEs for funding as they struggled to access traditional term loans.”

For those that don’t know, Mr Morrin is the Managing Director of RBS Invoice Finance which is a subsidiary of Royal Bank of Scotland one of those very same high street banks that are proving so difficult to obtain traditional term loans from thus forcing their customers into factoring.

The ABFA press release also stated that “that many businesses do not realise that the invoices that they have outstanding with customers are often the most valuable asset owned by the business, and that banks and other funders will willingly lend against them.

Intriguingly the fact that so many companies were unaware of invoice finance was one of the topics raised at the recent ABFA conference which did make me smile as the factoring companies were chuntering about exactly the same thing forty years ago and I wouldn’t mind betting that it’s been raised and discussed many times in the intervening years.

I’ve come up with a novel suggestion – why don’t all of the factoring companies get together and fund a joint marketing effort to raise awareness of the industry and the benefits available to the SME sector.

On second thoughts it’s a silly suggestion as it’s far too radical 😀

I came across the following on a financial services blog:-

The Payments Are Generally The Identical So It Truly Is Referred To As Fixed Repayment.

The bottom line is that business loans are not hard to get  they were just really easy to you like and so, you should don’t hesitate in availing this kind of special loan deal. Mid size companies with 20% or more profit margins or large companies is feasible in your area, and must answer the questions a loan company would ask… There is no benefit for financial services authority sbf to become involved in the collection of the invoices you like and so, you should don’t hesitate in availing this kind of special loan deal. The bottom line is that business loans are not hard to get  they were just really easy to is formatted into secured and unsecured forms. To renovate is feasible in your area, and must answer the questions a loan company would ask…

An individual can make arrangements or special your office.. Speak to a business financing expert to determine what benefits of factoring work for you, how the financing get a few years ago and have now resorted back to where they should be on the difficulty scale. If the factoring company can’t help them – they great business partners and help finance your business growth!! ) and offer facilities anywhere from businesses that have a reliable, consistent customer base. An individual can make arrangements or special and get paid.

Instead, factoring companies will primarily consider exactly how borrowers conceive things to be.. In essence, applications for business loans to start up companies are challenging for people today to have the things they need, significantly much less what they want. Speak to a business financing expert to determine what benefits of factoring work for you, how the financing exactly how borrowers conceive things to be.. You on the other hand can use that additional your office.. It is clear that unsecured business loans are costlier a wide variety of business purposes.

If anyone wishes to read further words of wisdom on a wider range of financial issues the website is [ link was deleted in July 2016 ]

I have made some New Year resolutions on behalf of Factoring Solutions in order to reposition ourselves from being known as the ethical factoring broker to the rich factoring broker.

Instead of introducing a prospect to the factoring company that we feel is most suited to their needs we are going to take a leaf out of the big boys books and introduce them to three or more factoring companies on the basis that whichever one they pick we will still end up winners.

Before putting in our recommended factoring companies we will contact them first to make sure that they haven’t got the lead from someone else as if they have we will put in someone else instead. It isn’t in the prospect’s best interests but hey we stand a better chance of getting a fee out of it and that’s what’s most important.

At the end of the year we will persuade the client that it’s in his interests to change factors. It isn’t really but we will earn another fat finders fee by churning the deal

One of the most lucrative areas of broking is handling manageaways from factoring companies that want to get rid of a client that they no longer want. In future we will only introduce leads to factoring companies that reciprocate by giving us managaways.

Finally we are going to tie up with an Insolvency Practitioner and insist that if the factoring company wishes to appoint Administrators to any client that we introduce then they have to use our nominated Insolvency Practitioner so that we can earn from that too.

A few years ago the Chief Executive of a factoring company once described me as one of the last gentlemen factoring brokers and that reputation means more to me than the extra income that I could undoubtedly earn if I actually went through with my New Year’s Resolutions so as with my resolutions every other year these are resolutions that will NOT be carried out.

Happy New Year to all my clients and funding partners and rest assured that Factoring Solutions will continue to act only in your best interests and not those of ourselves so we will continue to introduce companies to the single most suitable factoring company.

In fourteen years we have never churned a deal and will not be starting now and if our favoured invoice finance companies don’t use us to handle their manageaways we will still use them anyway and if (God forbid) one of our clients needs to go into Administration the factor can appoint whichever firm of Insolvency Practitioners they are most comfortable with

Ian