Factoring

NACFB funding statistics including factoring

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NACFB has issued a press release stating that a recent survey of it’s members showed that asset finance and leasing funding doubled in the last year to £2billion whilst invoice finance declined very slightly.

Whilst many of the more active brokers in the factoring and invoice discounting fields are not members of NACFB and therefore their own figures have not been included, the general trend does seem to be borne out by the ABFA statistics.

The NACFB’s Chief Executive, Adam Tyler, commmented: “We have continued to see the SME community struggling to raise funding and being faced with increased costs.”

“Despite many lenders’ protestations that they are lending more than ever, these figures reveal what anecdotal evidence has already shown: that funding for businesses is still hard to access, but it has improved if you know where to look.”

These sentiments are not unusual and the alleged difficulty in raising funding for the SME sector has been mentioned quite frequently.

Whilst overdraft funding is more difficult to arrange than in the past the vast majority of invoice finance lenders are finding the opposite problem as they are all actively looking for customers but it’s the customers who are few and far between as it seems that companies just don’t want to commit themselves to funding for expansion.

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Another article about termination fees and the incestuous relationship between some factoring companies and the insolvency profession

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The Telegraph has published another article callling for an investigation into the relationship between some factoring companies and the insolvency industry coupled with high terminantion fees charged by both parties. The article is here and claims that Government ministers are now beginning to show an interest in this subject.

In my view an investigation can’t come soon enough although I would add that not every factoring company gets up to these tricks but it is one of the reasons why Factoring Solutions is highly selective with it’s panel of factoring companies and why we only deal with relatively few

ABFA – No not that one

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I guess that quite a few Factoring Blog readers will have come across Brian Moore and his Asset Based Finance Associates by now as he has been nibbling away on Twitter amongst other places for quite a while about his disquiet with the factoring industry and he is leading a campaign for it’s regulation.

I must admit that when I first came across him I had mixed feelings as I agreed with many of the points that he was making but not all of them and to be honest I think that his £5billion clawback tax is a bit silly even if I can understand his reasoning.

I have made my own feelings known in print and in private about the unhealthy relationship between certain factoring companies and the insolvency profession and the fact that putting a factoring client into Administration can be highly lucrative for the factoring company involved.

As perhaps the doyen of the factoring industry I have seen many changes since I first got involved some 45 years ago but it’s only in recent years that the independents have looked at other ways to supplement their income and decided that maximizing income from failed clients is one way to do it and the boss of one factoring company recently told me that one quarter of their profits come from termination fees

Mr Moore had the misfortune to be factoring with the company that possibly has the worst reputation for termination fees but it is a practice that is becoming more and more widespread and the spoils for both the factoring companies and the insolvency practitioners can be quite lucrative.

In recent years we have also seen a proliferation of insolvency practitioners setting up broking divisions in a mad scramble to introduce new clients to factoring companies in order to grab a slice of the lucrative insolvency work from the factors in return which is something I personally find to be disturbing.

If I had my way insolvency practitioners that had broking arms should be barred from taking on insolvency work from factoring companies as it could be said that there might be a conflict of interest or if preferred they could handle the insolvency work as long as they didn’t act as brokers to that factor.

In any event I think that most industry insiders are aware that not everything within the industry is rosy and privately they would agree that regulation of the industry is long overdue and necessary to cut down on some of the factoring company excesses.

For anyone wanting a closer look at the aims of Asset Based Finance Associates the website is www.abfa.co and my own take on regulation of the factoring industry is viewable by clicking the link.

 

What’s going on at Aldermore

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It seems that Aldermore have closed their Maidstone office and transferred everything to Twickenham.

Rumours abound that the office is in chaos with staff leaving and payments to clients being missed as everyone is too busy in extended meetings to do them.

Having received two enquiries from Aldermore clients within the space of a week it’s obvious that something is not right there