Ian

Factoring and invoice discounting to be included in the Funding for Lending Scheme (FLS)

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Factoring and invoice discounting companies are to be included in the Bank’s flagship Funding for Lending Scheme (FLS), which is also expected to be extended by a year to 2015.

Invoice finance is the lifeblood of many small and medium sized companies as it is the main alternative to bank borrowings in providing cash flow for working capital, by allowing them to borrow against invoices.

The Chancellor is hoping the new arrangements will boost confidence and investment in a sector that accounts for 14m jobs – almost half of private sector employment – but has been starved of capital although I must admit that I’m not sure as whilst the Banks seem to have been loathe to lend, the factoring companies have been falling over each other to push money out of the door but companies have been loathe to sign up despite rates being at a historic low level.

Yet more invoice finance awards rubbish

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The following email has just been received from Acquisition International in connection with their prestigious awards:-

Dear Paul

As you may be aware we have been accepting votes for the 2013 M&A Awards, the winners of which are to be published in July. I am very pleased to inform you that we have received at least one vote for JPB Cashflow Services hence we would like to put JPB Cashflow Services forward as a possible winner.

First of all, congratulations to have reached this far, it is a big achievement to be identified by your peers and the market as a possible winner but with all nominees we do require permission from you. So if you’re happy to be considered, please do let me know by return email – just a simple ‘agreed to be considered’ will suffice.

Paul and JPB Cashflow Services do not exist as they are names that I made up a few years ago for anti spam purposes and the names plus associated email address must have been scraped off an obscure website yet the company has allegedly received at least one vote.

Regular readers will be aware that I consider the vast majority of these annual awards to be a complete farce with the winners generally being the company whether factoring company or broker with the largest number of staff available to vote for themselves. Whilst some may laugh it off as a harmless bit of fun I feel that it can give undeserved credibility with the general public not knowing any better.

The latest invoice finance awards winners, you couldn’t make it up

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That was the tweet from a friend and fellow factoring broker that alerted me to the fact that silly season was well and truly upon us in the form of the Business Moneyfacts awards following hard on the heels of yesterday’s offering.

The category that interested me most was the “Asset Based Finance Broker of the Year” award, as if one thinks about it logically who would vote in that category.

1) No factoring broker would vote for a competitor.

2) The companies that passed through the broker’s hands wouldn’t normally vote as they wouldn’t be likely subscribers to Business Moneyfacts.

3) The factoring companies would have a rough idea of who should perhaps be a suitable “Asset Based Finance Broker of the Year” but there is probably only a dozen factoring companies who would bother to vote anyway.

Who does that leave to vote – well I’m sure you can work that one out ?

I’m equally sure that it’s completely co-incidental that two of the three listed asset finance brokers are associated with insolvency practitioners who are themselves “finalists” in the insolvency section. 🙂

The industry insiders are well aware of what a farce these awards ceremonies are but the problem is that the winners then stick a logo on their websites and other marketing material stating that they are “Winners of ABC Awards 2013” which will give them implied credibility in the eyes of the general public which in many cases is not warranted.

As an experiment I think that I will register Lovely Jubbly Invoice Finance and ask all of my contacts to vote for it next year

Receivables Report Intermediary Index

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I had to smile whilst reading the so called “Receivables Report Intermediary Index” today when looking at the various category award winners as one of them is about to become the centre of quite a bit of unwelcome media attention this year due to it’s appalling treatment of clients coupled with a love of termination fees.

It’s not surprising that this factoring company ranks well as the “panel” that voted comprised a number of Insolvency Practitioners (reading between the lines) and this factor is renowned for it’s love of Administrators

Another has been brought to my attention on more than one occasion in the last six months for it’s quite unethical behaviour towards certain clients whilst a third has lost more clients than it has gained in the last year due to it’s poor service levels.

There is no way that I would introduce companies to any of those three but there are actually two on the list that I quite happily deal with although they will never come top in the rankings as they don’t “sponsor” editions of the journal

As a matter of interest no members of The Independent Factoring Brokers Association were involved in the compilation of this index

Silly season must have come early as elsewhere a list of half a dozen “ethical factoring companies” has recently been published which includes two that don’t have much of a track record and aren’t actually traditional factoring companies at all whilst another has only been trading for five minutes and has just a handful of clients.

Whilst I have nothing against any of the three and indeed actively deal with one of them I’m not sure that it’s helpful to draw up a list of ethical factoring companies that only includes three recognized factors plus three from the fringes.

ABFA Code of Conduct

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The long awaited code of conduct from the ABFA has been announced and this will be coupled with an independent system of dispute resolution managed by Ombudsman Services.

Further good news is that the ABFA is also establishing a Professional Standards Council which will be mainly comprised of members outside of the industry, and they will consider issues emerging from the complaints system and make recommendations on actions to further repair and enhance the reputation of the industry.

In theory this is good news but it does depend on the will of the ABFA and it’s members to clean up their acts.

One interesting point in the code is that all factoring companies will be required to include a note in their Agreements saying that a commission will be payable to the introducer which I’m sure won’t cause any heartache but the next clause insisting that each factoring company shall provide full details in writing of the amounts involved and the method of calculation of any future commissions if requested, might cause issues for some of the larger broking outfits who insist on commissions way above the levels that are deemed to be the norm within the industry.