Factoring

ABFA statistics for factoring and invoice discounting in 2011

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This week saw the release of statistics for the factoring and invoice discounting markets for the final quarter of 2011 which meant that the picture for the whole of the year is now available.

It would seem that yet again the factoring companies made no overall progress with the number of companies using factoring and invoice discounting facilities hardly moving at all although the funding provided to them increased overall.

The most worrying figure though was the fact that the overall net gain of 408 clients was achieved by taking on 11,121 new clients and losing 10,713 clients in the same period.

The 10,713 clients lost in the period equates to one quarter of the total client portfolio at the end of the previous year and that is a truly worrying statistic.

Two figures that I would like to see revealed are the amount of fees levied overall to failed clients as termination fees and the amounts received by insolvency practitioners from failed factoring and invoice discounting clients as I have a sneaking suspicion that the amounts would be quite shocking

A representative of ABFA obviously struggling for something positive to write stated that “The new figures show that increasingly larger firms are choosing invoice finance because of both its inherent strengths and its availability. The overall figures are a strong endorsement of invoice finance and show that it continues to grow in popularity, not the least because firms which use it are able to grow and increase their turnover.”

I think that one of the main reasons why larger firms are choosing invoice finance is because their bankers are giving them no other opportunity as the banks’s own security position is much better with invoice finance rather than the traditional overdraft and I’m not sure that losing one quarter of clients and just about managing to replace them constitutes a growth in popularity either.

Touch Financial Support | are they ethical or not

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The website for Factoring Solutions has fortunately been on page one of Google for the last ten years but one of the downsides is that it makes me a target for others who would like to share in my success by fair means or foul.

A Google search for factoring solutions last week came up with a result in 11th place headed:-

Benefits Of Using Factoring Solutions | Touch Financial
Factoring Solutions – Over 40,000 business in the UK now use factoring and invoice discounting. Read more about how factoring could help your business grow, …

My website which has been online since 1999 currently starts off with “Factoring and invoice discounting is being used by over 41,000 companies UK wide” and what is more I have used similar phrasing since 2003

It would seem that Touch Financial Support have cleverly manipulated the meta tags on the website in what looks like an attempt to try and lure people there who are actually looking for my Factoring Solutions website

The H1 title on Touch Financial Support’s web page is headed “Benefits of using Factoring Solutions” and as the webbies reading this will know, Google attaches importance to the H1 titles.

Whatever Touch Financial may claim to the contrary “Benefits of using Factoring Solutions” is hardly correct grammatically and the upper case S in Solutions gives the game away anyway.

As if that wasn’t enough there are further references throughout the page as follows:-

The benefits of using Factoring solutions is that cash flow is assured

Businesses seeking Factoring solutions have two options

What’s the cost of using Factoring solutions?

Naturally, one of the key considerations when thinking about Factoring solutions is the amount it will cost

If you believe that Factoring solutions could be for you the next step could be to contact Touch Financial to compare quotes

In my mind there is no doubt what Touch Financial Support are trying to do and whilst it’s quite legal the question that I ask is whether it’s ethical or not.

I know that some of my competitors read this blog so if anyone from Cashflow UK is looking in you might want to have a look at  www dot touchfinancial.co.uk/knowledge-centre/guides/factoring/factoring-uk as they have tried the same trick on you with this page deliberately designed to try and lure people searching for Factoring UK as your company used to be called.

I did contact Touch Financial Support asking them if they were finding these tactics fruitful but apart from a standard email thanking me for contacting them they didn’t bother to respond further.

The Small Business Finance Directory

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Small Business Finance Directory has been launched in an orgy of self promotion with almost every online magazine carrying stories about this joint venture between National Association of Commercial Finance Brokers (NACFB) and Finance and Leasing Association (FLA) and the Asset Based Finance Association (ABFA)

It is supposedly “a brand new tool aimed at promoting access to vital funding” and it’s brief is to “help around 60,000 businesses find suitable commercial finance in its first year”

Having had a look at the directory it seems to be little more than a listing of all members of the three organizations with one or two non members added for good measure. Certainly in my own field most of the major factoring brokers that don’t happen to be members of NACFB aren’t listed and far from being designed to help business access suitable funding it seems designed more to make sure that they only find suitable funding via Association members.

Factoring and Google

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Checking Google to see how the factoring brokers and companies are ranking is something that I guess most of us do regularly. Getting a high position whether organically or on the paid for ad section is only half of the battle as you also have to make the strapline appealing enough to make potential customers want to visit your website.

Looking at the various brokers and factoring companies jockeying for position this morning there were two PPC ads that stood out for different reasons.

Firstly Cashflowuk who claimed that they were a “UK factoring broker with over 60 years experience.” Although that may sound appealing to anyone who knows nothing about factoring it is both meaningless and irrelevant as it could mean that they have one person who has been in the business for 60 years or else they have 60 trainees none of whom have been in the business for long.

I would guess that I am possibly the longest in the tooth of all factoring personnel as I’ve been in the factoring business for about 40 years but how relevant is that as the business has changed so much that any knowledge of market conditions prior to the last five years is probably irrelevant anyway.

Still, neither Cashflowuk nor myself are anywhere close to factoringcompare.com who make the bold claim on their website that “You benefit from our 100 years plus experience.” I wonder if they had to close down for the duration of World War 1 whilst they went away to fight in the trenches. 🙂

The second PPC ad to catch my eye was that of Close Invoice Finance as their strapline was that they were the “2010 Credit Today Winner” This is another of those “shoot yourself in the foot” straplines” that amused me in a previous post as the first thing that anybody who takes these awards seriously would do is to look up who was the 2011 Credit Today winner and approach Hitachi Capital Invoice Finance instead.

The only other PPC ads that caught my eye were from Bibby plus Close’s second ad as they were both headed “Factoring Solutions.”  Thanks Guys

Whilst Bibby and Close have just used my company name in their headline the Factoring Solutions award for plagiarism goes to firstfactoruk.com whose website meta description uses the phrase “We know which factoring companies deliver”.  Hmmm I’m sure I’ve seen that strapline somewhere before 🙂

Whilst the above are nothing really more than amusing, the growth of the internet has seen a huge rise in misleading websites and once I have done a little more research I will post again about misleading websites including the “broker” who has a glowing testimonial from a satisfied client who according to Nominet actually owns the website in question – but that’s for another day

Factoring and insolvency practitioners

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Chatting to a another friend from a different independent factoring company yesterday and he told me about the prospective client who had agreed terms etc but a closer look showed him to have the sort of financial problems that would be better served by closing the company down and restarting.

The prospect chose their own insolvency practitioner who promptly got another factoring company involved on the basis that he wouldn’t receive any commission from a deal that he hadn’t introduced.

Unethical?   Just a bit