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
Ian
A moral dilemma
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
GMAC Commercial Finance for sale – now confirmed
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.
Cattles Invoice Finance shakes off it’s subprime branding
It may well have been a big surprise to many people but the press release sent out earlier this week announcing that Cattles is shaking off it’s rather downmarket image by rebranding as Absolute Invoice Finance will have come as no surprise to readers of this blog as we gave away their secret way back in April.
When writing the text for Factoring Solutions website ten years ago in 1999 I added the quip that “many companies using invoice finance to speed up cash flow still find their factor by looking in Yellow Pages – which is surely why there are so many factors beginning with the letter A” and it gives me great pleasure that the powers that be at Cattles have heeded my words 🙂
I doubt whether many people use Yellow Pages any more but there are obviously web directories that list factoring companies in alphabetical order so Absolute will jump up the queue with their name change and regain the position that they had when they used to be known as Argent Commercial Services.
I wonder if anyone will now consider changing their name to Aardvark Factors to get pole position
Interesting article in FT slating the banks
The managing director of Mandor Engineering was complaining in the Financial Times a couple of days ago that the banks were being unhelpful and wouldn’t lend to his company unless via invoice discounting which would cost more.
He then went on to give a bit of background to his company which makes doors for commercial and industrial premises, turns over £2m per annum and last year performed so badly with falling sales and bad debts that it was forced into Administration.
It isn’t often that I feel sorry for the banks but having been publicly slated for the poor lending that got them into a financial mess they are now being slated for not lending to companies that have demonstrated that they are also poor risks