Factoring

I’m not a great user of Twitter and although I use an automated program to repost blog posts from both here and my website to Twitter I don’t very often actually log in to read tweets by others.

I did log in this morning and had a quick read of some of the self promotion from the people that I follow and noticed that the scourge of the factoring industry Brian Moore had been very quiet lately so searched on his name to find his last tweet only to be met with the words “You are blocked from following @rabf_ and viewing @rabf_’s Tweets”

Having patiently read his tweets over the years which normally comprise phrases like “We are closing in on a big expose” without ever commenting I finally did comment on a couple of his tweets at the tail end of last year.

In early November we had the following exchange with my initial comment being rather obviously tongue in cheek

Asset Based Finance @rabf

Visting the  fpshow2014 remember the factoring business invoice finance is totally unregulated & open to fraud

Factoring Blog

That’s certainly true as it’s surprising quite how many companies try and defraud their factoring company

Asset Based Finance @rabf

Difference is that no expects their factoring company to be a fraudster signing clients to bust them

Factoring Blog

You’ve been mud slinging for two or three years now but in that time have you actually produced one genuine case?

Round two started later in November when Brian decided to put his own spin on a media report completely distorting it in the process

Asset Based Finance @rabf

“toxic” and “aggressive” culture inside banks led 2 fraud in factoring finance industry take generation to change

Factoring Blog

There is no mention at all of the factoring industry in the report so please don’t put a spin on the report that isn’t true at all.

Asset Based Finance @rabf

Let me get this right a £300bn unregulated asset based finance industry has had no fraud no criminal acts Yer Right

Factoring Blog

Maybe or maybe not but that was not what the report was about and you were just adding your own bias to it

Asset Based Finance @rabf

Yes you are right the banks created factoring divisons outside the PRA so that commit fraud #Lloyds

Factoring Blog

The banks actually created their factoring divisions 50 years ago before all of this regulatory stuff existed.

It seems that like many cyber bullies Brian is quite happy to use the world wide web to rubbish the factoring industry but even the mildest of criticism isn’t to be tolerated and results in his critic being barred from access to his tweets

2014 has been another difficult year for the factoring industry showing very little growth in terms of client numbers with the 6,669 new clients taken on in the first nine months of the year being almost completely negated by the 6,397 lost in the same period.

The statistics provided by ABFA show that the 43,708 companies using factoring and invoice discounting as at 30^th September 2014 were using £19.3 billion of funding which was an increase of 12% on the previous year’s funding levels.

The trouble is that we don’t know the reasons behind the increase in funding levels. It would be good to think that the companies needed higher levels of funding as they were selling more but it is equally possible that companies that were not fully utilizing their facilities in previous years had upped their cash requirements due to poor trading

82% of the total client numbers are companies turning over £5m or less and their numbers actually declined by 109 companies but the remaining 35,600 companies in this sector increased their funding levels over the previous year but as always the figures are skewed by the inclusion of the 700 companies turning over in excess of £50m pa meaning that 1.7% of the total number of companies were responsible for 39.9% of the total funding thus making many of the overall statistics meaningless.

Leaving published statistics aside almost all factoring insiders are complaining about the lack of activity in the market and have done so for most of the year with most of the factoring companies and brokers feeling the pinch.

Against this backdrop we have seen yet more factoring companies setting up with Richard Pepler launching HH Cashflow Finance as part of the Henry Howard Finance Group, Arbuthnot have either launched or are about to launch a new factoring subsidiary of their Secure Trust Bank subsidiary and there is at least one senior factoring executive doing something under the radar although I haven’t heard any rumours yet.

2014 has probably been the year when alternative forms of invoice finance began to take more of a hold – at least in the public’s imagination if not in hardcore lending. The market leaders are those masters of self promotion Market Invoice whilst rumours abound that one of their competitors are finding life difficult and I must admit that I watch this market sector carefully as I am very dubious about any form of invoice finance that takes place without debentures, personal guarantees or most importantly, due diligence

From a more personal point of view Factoring Solutions haven’t managed to buck the trend and we have seen a reduction of about one third in the number of enquiries received throughout year although the conversion rate has been higher so the net number of companies taken on will end up similar to last year which is a positive sign.

I apologize that the updates have been somewhat scarce this year but in all honesty there hasn’t been that much to write about and although there are interesting things going on in the background much of what I am told is in confidence and therefore cannot be published.

May I finish by wishing Seasons Greetings to all readers of this blog and hope that we all have a prosperous New Year

My interest was aroused a couple of months ago when I received an email from Jasmine Tait at InvoiceBackup.co.uk telling me all about the wonders of factoring and asking whether I would be interested in factoring my debts.

I had a look at their website in which they claimed to be established factoring brokers dealing with such well known factoring companies as Touch Financial and Invoice Finance Village and I bookmarked the site intending to do some further investigations only to find that the website had disappeared.

A couple of weeks ago I received another email, this time purporting to be from Madeline Walters of invoiceadvisors.net again asking if I would like to factor my debts.

Once again I did some research to find that this allegedly well established broker’s website had only been registered two weeks prior to the email being received but the owner must have been a bit shy as the domain was registered in the name of a nominee in Panama.

The website itself looked fairly professional and the company allegedly had relationships with a few factoring companies including Hitachi (which I doubt) but rather than investigate immediately I put it to one side until today.

As with the first site this one has now disappeared and the telephone number is unobtainable.

I’m not sure what is going on here but whatever it is can’t be healthy and it’s difficult enough as it is for the poor prospect to know whether he’s getting sound advice or not from his broker without people like this muddying the waters.

On a slightly related matter I came across someone on an internet forum asking whether anyone could recommend a decent, honest and reliable factoring company and I responded that I could and suggested that he contact me to discuss the various options that might be open to him.

Up popped someone whom I had never heard of who’s forum signature suggested that he offered “Accountancy, Book-keeping, payroll, Specailist Pub Accountant ,IT solutions, Free Factoring Service” (his spelling not mine) saying that he had a relationship with a factoring company that would quote 10% cheaper than anyone else.

I dread to think who this might be but checking again with Nominet shows his domain name to have been registered just one week ago.

At least in this instance I think that the chap is genuine even if a bit of a jack of all trades and the individual who asked for advice said that he would telephone both of us.

I will evaluate the business and introduce him to the most appropriate factoring company for his needs whereas “Jack” has probably already decided that this is one for his discount buddy

On ITV2 is a reality TV show called Bad Bridesmaids and tonight’s episode at 9:00pm features one of our very own making a fool of herself showing the world that the acting profession’s loss is factoring’s gain.

I fear that Emily won’t be long for the world of commercial finance if any Hollywood casting agents are watching but at least in years to come when I’m watching her starring in the latest Michael Bay Blockbuster I can take pride in the fact that she once bought me lunch 😀