Factoring Solutions – the year so far

We are now one third of the way through the year and it’s been an interesting period. Enquiries were down 25% on the same period last year but interestingly enough one third of this year’s enquiries have been for spot factoring whereas in the same four months of 2012 we didn’t receive one single enquiry for single invoice factoring.

In common with most other brokers and factoring companies the conversion rate is worse than it has ever been with far fewer companies actually signing up despite having been given pretty decent offers. Everyone has their own theories but I believe that it’s just a general lack of confidence in the economy and a wish not to take on any further commitments until the economic outlook is a little brighter.

Historically we have handled a large number of new start recruitment companies and I knew that whenever the phone rang at five minutes past one that it was yet another recruiter sneaking out in his lunch break to discuss the financing of his own operation but I have been able to eat my own lunch in peace recently as recruiters aren’t willing to strike out on their own at the moment.

Lowlights of the year included two separate healthcare companies who were unhappy with the incumbent factoring companies and wanted recommendations of factoring companies with higher service levels who then subsequently refused to speak to either of the companies that we introduced or to return their phone calls either. A company search revealed that the first company had a debenture registered to Lloyds TSB Commercial Finance one week after speaking to ourselves and the second registered a debenture to the same factoring company two months after speaking to us.

Whatever reason these two companies had for not wanting to talk to the factoring companies that we introduced them to they could have had the courtesy to pick up the phone and say “no thank you” rather than just hiding. I often feel that people like this are perhaps not best suited to running a company and these two weren’t alone either.

We then had an enquiry from a company spitting feathers at the mere mention of their existing factor claiming that the service was terrible, the account manager never returned calls and they charged for everything in sight including speaking to their account manager and they were desperate to get out of their clutches

Discreet enquiries with an insider at this particular factoring company confirmed that in his opinion all of the complaints were justified so we introduced them to a competitor who was unable to progress the case as the prospect complained that moving wouldn’t save them any money.