The Financial Times has now got in on the act by reporting on the campaign for regulation of factoring companies but unfortunately they do themselves no favours as the one newspaper that is supposed to understand corporate finance has managed to get it all wrong.
The first paragraph starts off with “A group of business owners pushing for regulation of lenders that provide funding based on company order books has admitted that it is likely to be a more difficult process than first imagined.”
How can one be expected to take an article seriously when they don’t even appear to understand what factoring is.
The next section deals with the comments made by one particular insolvency practitioner who is trying to convince people that regulation isn’t necessarily a good idea – well shock, horror turkeys are against Christmas. Obviously insolvency practitioners aren’t keen on regulation as many of their more outrageous money spinning activities will be severely curtailed.
The final segment of the article homes in on one particular case where the company owner blames a specific factoring company for putting his company down but only factoring insiders will understand from what sketchy details have been given that the company was involved in fresh air invoicing. Perhaps he read the Financial Times article and thought that it was acceptable to factor his order book.
I am all for regulation and for much greater tranparency in the relationship between certain factoring companies and the insolvency profession but come on, this company was defrauding his factors and deserves everything he gets