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.

GMAC Commercial Finance for sale

The above is the search term used by someone last night in Google who ended up on this blog. The IP address was in Brighton which leads me to wonder if it had anything to do with the meeting of GMAC staff that was arranged in Brighton for yesterday afternoon where something of importance was to be discussed.

Factoring Blog review of the first half of 2009 part two

Factoring charges in the past have been driven down and down as one or two of the major bank owned factors have tried to buy market share at any cost. The activities of an internet lead generator with an automated online pricing model hasn’t helped as any such thing must be price driven thus driving prices down even further and the factors have tried to redress this by looking at other ways of increasing revenue rather than affect their headline rates. To this end we have seen the introduction of facility commissions which is a percentage of the agreed facility and is addition to the factoring commission. At least one of the big bank owned factors is now incorporating renewal commissions too if the poor client wishes to renew his facility at the end of the year whilst the worst one of the lot has been sneaked in by one of the big boys who has stuck in a termination fee which becomes payable if the client wishes to terminate his facility whatever the reason whatever the time.

Wageroller and Smart Flow Finance have bitten the dust although there are rumours that Wageroller has resurfaced under a new name but the only factoring company to have succumbed in the first quarter of the year has been Challenge Finance.

I started off the year by announcing that GMAC had pulled down the shutters for new business but I had a meeting with one of their regional directors yesterday who told me that they were now in full steam ahead mode and with quite an innovative range of ABL products too.

Even in a fast changing world like the one we currently live in there are some things that never change. At the end of last year I announced that the parent company of Cattles Invoice Finance were about to sell the company and that would happen “any day now”. Six months down the line the supposed sale of this factoring company is still just round the corner as the parent gets further and further into the mire with it’s negotiatons with bankers unresolved, it’s accounts delayed as the auditors won’t sign them off and the shares suspended. Still I’m sure that a Cattles insider will be contacting me shortly to let me know that the sale will be happening “any day now” as has been happening at monthly intervals throughout 2009 so far. 🙂

The other enigma is Close Invoice Finance which at one time was a market leader in terms of client satisfaction but where the stories of ill treatment from unhappy clients just seem to keep on coming. This year to add to the confusion Close have closed the operating centres in Birmingham making a number of redundancies in the process in order to cut costs whilst at the same time employing an industry heavyweight on what must be a huge financial package to run the Northern operation, as well as buying a small factoring operation in Northern Ireland.

My predictions for the second half of 2009 are to expect much of the same. The market will still be tough to operate with the well run independents riding out the storm without too much damage to either their reputation or bottom line but I think that the recession coupled with the tough attitude taken by the credit insurance market will start to see big problems in the top end of the invoice discounting sector with companies turning over in excess of £50m failing and possibly resulting in significant bad debt losses for the banks operating those facilities.

Time will tell.


GMAC stave off bankruptcy

It was announced in the final week of 2008 that GMAC had won US approval to have banking status in a move that should help the company stave off bankruptcy. This is of interest to us as they are the parent company of GMAC Commercial Finance, a company that was once the market leader for factoring and invoice discounting in the UK but which seems to have lost it’s way since Lloyds TSB sold it in the late nineties.

GMAC Commercial Finance appear to have put up the shutters for new business some time ago but if the parent company have any cash left from the interest free loans they are providing to Americans to persuade them to buy GM cars, perhaps they might once again become active in the UK factoring and invoices discounting markets