4Syte and Barclays Factoring

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I am sure that clients of Barclays factoring division were surprised to hear a couple of weeks ago that the bank had sold their factoring portfolio to the little known finance company 4Syte

It seems that quite a few of these clients are unhappy with the arrangements as they didn’t wish to be palmed off onto a factoring company that they had never heard of so have started contacting other better known factoring companies in an effort to be moved on.

I must admit that I knew very little about 4Syte so a little research turned up the fact that it’s a fairly new company headed up by Nick Sellars which was a name that I did recognise from way back as he was Managing Director of the late unlamented Aston Rothbury Factors which went bust just over ten years ago.

He then set up Platinum Funding which later morphed into Pulse Cashflow which as readers of Factoring Blog will know is my least favourite factoring company.

Instead of trading as a single company 4Syte seems to consist of a group with a separate company formed for each type of finance that they undertake with at least nine different 4Syte companies in the group with Balder Capital Ltd being shown as a person with significant control.

Barclays have always had an uneasy relationship with factoring as they were the last of the High Street banks to set up an invoice finance division and even that was very slow to get going and sizewise never got close to the other banks in terms of vanilla factoring clients and turnover and even their operations were unusual as they used a third party for much if not all of their new client Onboarding.

It seems that 2021 might see a considerable amount more of changes in the industry as rumours abound that factoring clients of RBIF have been given six months notice too so there will be a mad scramble amongst factoring companies and brokers to hoover up their clients too.

Factoring Solutions do not operate as ambulance chasers but any factoring client that is unhappy with their existing arrangements should feel free to contact us on 01827 707680 for an informal chat completely free of charge

 

The Calverton Pulse tie up

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I am in a bit of a quandary due to a recent takeover in the factoring industry. I am happy to admit that Calverton Finance was one of my favourite factoring companies for certain types of client as their service levels were second to none and I had a lot of faith in the senior management team for the way that they went about running a factoring company. With very few exceptions clients that they took on tended to stay with them.

The Managing Director retired a year ago and the Sales Director left shortly thereafter which was a shame as they were both ethical, capable people that I had a lot of time for.

Rumours had been circling around the industry for a while that they were for sale but it was a bit of a shock to me to hear that the company that ended up buying them was the parent company of Pulse Factoring Solutions Ltd which is a factoring company that I have always adamantly refused to deal with

Pulse started life run by two ex directors of the late unlamented Aston Rothbury Factors which went bust in 2013 and for many years it had the reputation of being the lender of last resort with many of their factoring clients not lasting very long.

“Pulse” wasn’t an easy company to follow the fortunes of as there seemed to be quite a few companies bearing the Pulse name some of which didn’t last long before being dissolved and most changing their names at least once.

Most of the independent factoring companies are funded by back to back arrangements with banks but Pulse’s financing didn’t seem to be quite so easy to follow until three years ago when it’s financing was taken over by a company in the group that later acquired them.

Pulse Factoring Solutions Ltd is now part of the Cubitt Trade Holdings LLC group which itself is directly wholly-owned by PETRA Group Holdings Limited, a Cayman Islands limited liability company. PETRA Group Holdings Limited is wholly-owned by BlueCompass Management Partners LP, a Cayman Islands limited partnership.

Now you can see my quandary. One of my favourite factoring companies that looks after a number of my clients now tied up with a factoring company that has always been at the top of my dislike list.

Hopefully Calverton will be left to continue under it’s existing management and more importantly with it’s existing business philosophy but I will be keeping a very close eye on my clients there. One of the reasons that factoring companies like dealing with me is that unlike many of my broker competitors I don’t churn my clients on an annual basis in search of greater commissions for myself but if I find that the service levels are decreasing I will have no hesitation in moving my clients onwards and upwards.

Working Capital Partners – Administrator’s Report makes grim reading

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The Administrators of WCP Finance (formerly Working Capital Partners) have published their progress report and grim reading it is too

Salient points include the fact that at the date of their appointment the company’s book debts totalled £1.1m and of that sum £745,000 is considered to be bad debt where either the customers have gone bust themselves, the invoices are disputed, long term repayment plans have been agreed or where “funds have been misdirected away from the company to borrowers’ bank accounts in breach of the funding agreement” (whatever that means)

It seems that at the date of the Administration 68% of the book debt was bad or doubtful which is a shocking figure and symptomatic of a very poorly run factoring company.

In addition it seems that a significant sum due from SME Tradeflow has been disputed. I am aware that when a company goes bust their customers will often try and find ways to wriggle out of paying but in this instance SME Tradeflow is owned by the very same Perry Burns who owned Working Capital Partners so it seems that his left hand is disputing the amount owing to his right hand.

Hopefully Mr Burns has given up trying to run a factoring company as he has registered The Electric Motorbike Company Ltd which last month registered a charge to Berkeley Trade Finance Ltd which is itself a fairly new company being registered in March 2019

It will be interesting to see how these two companies fare and I will watch their activities at Companies House with interest.

Additionally Mr Burns is also a director of Working Capital Partners Ltd (formerly WCP Capital Ltd) which is the result of a name swap prior to Administration plus a company called Confidential Invoice Discounting Ltd so let’s hope that both companies remain dormant

Working Capital Partners have gone bust

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I have been reliably informed that Working Capital Partners Ltd have gone bust and Administrators have been appointed.

This comes as no surprise to me and although I haven’t written anything about my least favourite factoring company for over a year the signs were all there for anyone keeping their ear to the ground to see.

In addition to their large exposure to SW Metalcraft that went bust in quite a big way there were rumours of another significant loss in their portfolio with the two losses totalling in the region of £700,000 which is a sizeable sum for a small company with an issued capital of only £1,000.

Their back to back financing facility with the respected ABN Amro was cancelled a few months ago leaving their financing down to an Isle of Man Bank that I’d never heard of and following my comments that their management was inexperienced they claimed to have appointed the high profile Geoff Longhurst to the board in a desperate bid to buy respectability in January 2019 although a search at Companies House showed no trace of his appointment.

It’s always sad (but rare) when a factoring company goes bust although I must admit to a small smile at Perry Burns’s discomfort, especially as he is likely to lose far more of his own money than he shafted me out of.

Working Capital Partners Ltd changed it’s name to WCP Finance Ltd on 11th April 2019 allegedly to illustrate the more rounded offerings of the company but five days later Perry Burns craftily changed the name of one of his dormant companies to Working Capital Partners presumably to try and carry on regardless hoping that people wouldn’t spot what had happened

There are actually rumours that the so called experienced management are looking for funding to mount a rescue package but why would any bank or finance company offer financial facilities to a management who have already proved themselves inept at risk management

Needles to say if any of Working Capital Partners’ hapless clients need a quick introduction to a spot factoring company that is well run, treats clients properly and is unlikely to go bust and leave them in the brown stuff please do not hesitate to contact me at Factoring Solutions on 01827 707680

For those new readers who don’t know about this sorry saga my previous blog posts are:-

Working Capital Partners – brokers and introducers beware

Working Capital Partners Ltd – the saga continued

Working Capital Partners Ltd – the final chapter

 

 

First Capital Factors Administration has ended

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First Capital Factors Ltd which went into Administration just over two years ago has just filed a notice at Companies House that the Administration has finished.

The Administration has left loads of questions unanswered so I wonder if we have heard the end of the matter.

The Statement of Affairs showed a deficit of just over £5.6m which begs the question where did it all go as surely a small supposedly profitable factoring company couldn’t lose that amount of money in it’s normal way of business.

It seems that a number of their clients were asked to raise fictitious invoices for what were evidently substantial amounts of money which unless I am missing something is fraudulent on behalf of the person or persons who asked them and those that supplied the fraudulent invoices which to my mind is criminal.

This isn’t a victimless crime as whilst people may not have much sympathy for banks in the form of Leumi a loss of close on £2m was made by the 350+ investors from the Thincats syndicate who recovered not a single penny back from this debacle. The investors in Thincats aren’t all multimillionaires but are ordinary people like you or I who looked for a slightly higher return on their savings than on offer from the mainstream banks.

I would have thought that after two years and with the Administrators having reported their findings into the conduct of the individuals in the company as well as the clients’ involvement that some murmurs would have been heard about fraud enquiries.

Us outsiders won’t know which of their clients were involved but as most of the clients went either to Leumi ABL or elsewhere after the Administrators were appointed I would guess that the tainted ones are those clients that didn’t move at all.

I am aware of one of their clients who switched their business out of the company factoring with First Capital Factors to a previously dormant and fresh company at about the time of the Administration and wonder if they are one of the companies involved as I understand that the principals of the company were long standing friends of the chairman of the factoring company.

In the late seventies there was a similar situation at Bank of America’s factoring subsidiary where a group of their clients submitted fraudulent invoices at the behest of the factoring company’s directors and that ended up with three and four year jail sentences for the two executive directors of the factor who organized the fraud plus two directors of the clients who issued the invoices.

Somehow I don’t think that we have heard the last of this.