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Stories Tagged ‘Invoice Factoring Companies’

31 Aug

Aldermore Invoice Finance »

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Aldermore Invoice Finance was announced today as the new name for Absolute Invoice Finance that was previously Cattles Invoice Finance. While not a new invoice factoring company it is now part of a bank which can offer asset finance and commercial mortgages.

Aldermore Bank is described as ‘the new British bank’ and was formed by the merger of Ruffler Bank Plc and Base Commercial Mortgages. It is wholly owned by a private equity firm AnaCap Financial Partners Plc and it targeting savers by offering attractive rates and SME’s through asset backed lending.

Personally I have never been sure about Cattles and more recently Absolute Invoice Finance mainly due to pricing, credit appetite and having been let down a few times recently. They are assuring everyone of the same level of service so I am not sure that is a good thing.

That said, alongside invoice factoring and invoice discounting they have asset finance capabilities and offer both residential and commercial mortgages and may be the best lender for some clients. They can certainly look at more asset classes than most of the independent invoice finance providers. They are also claiming to be very liquid and open for business so it will be interesting to see how things progress.

I wish them well and hope that things do improve. It is always good to see lenders develop new capabilities and bring new offering to SME’s.

If you are looking for an invoice finance facility and want to know what options are available to you contact Smart Factoring Quotes today.

24 Aug

Factoring in Ireland »

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Factoring in Ireland has become increasingly difficult in recent years as the economy and banking industry in particular has been hit hard.

Arguably when companies require cash flow facilities the most the Irish banks have not been in a position to help except in the most straight forward of cases.

There are however, several invoice factoring companies in Ireland who have stepped in to fill this void. As such Smart Factoring Quotes Ireland was set up to help Irish businesses find the lender best suited to meet their needs.

22 Aug

Construction Factoring »

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Construction Factoring is challenging for invoice factoring companies for a number of reasons.

Any invoice factoring company wants to know that the value of any invoice that they have funded against is secure. In the event of business failure they want to be able to approach the clients customer and request that the invoices they have taken good title to are paid in order to recover their position.

With this in mind if you consider how the construction industry operates you will see how this can cause issues for invoice finance companies.

In the first instance most contractors within the construction industry raise ‘applications for payment’ rather than invoices. As such invoice factoring companies cannot take good title to the applications in the traditional manner.

The work done is usually measured weekly, monthly or against specific milestones and as such applications or invoices are raised for a part completed project. Should the contractor fail to complete the project then liquidated damages can come into effect which render the outstanding invoices worthless. As such any invoice factoring company would not recover their position against these invoices.

Retentions at the end of the contract can also cause issues for invoice finance companies but these effect the prepayment level rather than the ability to provide funding.

Bad news for the construction contractor looking for a flexible working capital facility? Well, it is not all bad news. Smart Factoring Quotes have lenders who can provide invoice finance facilities to construction contractors. Get in touch today.

18 Aug

Time to change Invoice Factoring Company? »

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Over the last two years we have seen a fair amount of inertia from both clients and lenders alike.

Invoice finance clients have tended to stay where they are and ride out the storm of the recession. Most of the clients we have seen move have been clients where the relationship has broken down to an extent that they have had to move lenders.

Invoice finance companies have also seemed to be fairly static in that they have not actively been seeking new business and have been wary about any client looking to transfer from another lender.

I am sensing this has now changed. The major banks are actively seeking invoice finance clients again and are taking on sensible risks again at good rates. A large well backed independent invoice factoring company approached us last week advising they would not be beaten on price. It is great to see an independent competing with award winning service levels and on pricing.

Clients seem to have sensed that it may be a time to change as our inquiry levels have increased dramatically in the last couple of weeks. These clients are right. There is no need to put up with overpriced facilities and poor service levels. It is well worth seeing what is available in the market place.

If you feel that we can help visit Smart Factoring Quotes and get in touch.

16 Aug

Back Office Service Providers – Beware »

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I have recently taken on a case for a client who is leaving a back office service provider and wanted to highlight some risks associated with employing such a company.

My client is a recruitment business who use a back office service provider to raise invoices, do the payroll, credit control, etc.. This service is similar to factoring but is typically provided to temporary recruitment agencies as an opportunity to outsource almost everyting so the business van focus on sales and placements.

These services receive varied feedback in terms of service levels but unfortunately in this instance the implications are for more serious. The lender concerned has failed to pay over circa £500,000 of monies that was due to HMRC and do not appear to be in any position to do so soon. It would appear that our client remains ultimately responsible for bringing the situation up to date with HMRC.

I understand there was a similar situation with a payroll finance company called Wageroller who went under leaving their clients owing large sums to HMRC.

There are obviously some very reputable providers and Lloyds TSB are possibly the largest with their Cash Friday facility. The fact remains that not all other providers seem to be as reputable or as financially robust so be careful.

I have not mentioned the providers name as I have not spoken to them to hear if there is another side to the story. It does however raise concerns and is certainly worth a post.

16 Aug

Aston Rothbury acquired by Bibby »

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Bibby Financial Services have acquired the book of invoice factoring company Aston Rothbury. It is understood that Bibby have absorbed this book into their very successful office in Hastings.

In terms of client numbers we have heard that it was only 40 clients.

The same Bibby office also acquired the Arbuthnot office last year but some of the staff have since left and set up Innovation Finance.

16 Aug

The New Arrivals »

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We have seen a fair amount of consolidation in the invoice finance market over the last few years and some lenders have left the market for good.

However, in recent years we have seen some new lenders enter the market and I wish them well. Personally I think there is always room for lenders who want to provide a good service to clients and if their ‘positioning’ is niche in anyway I think it is fantastic.

Gener8 Finance seem to have been well accepted and client numbers have swelled. They are targeting the smaller end of the market with a view of providing invoice discounting facilities with flat fee structures to smaller companies who normally only attract factoring offers. I am not sure they are actually offering traditional confidential invoice discounting facilities in the majority of instances but clients are signing up so they are doing something right.

Bob Crumbley who was at London Scottish has set up a company called Team Factors with John Schulman who was at Coface. I have seen very little PR about the company but understand they they are also looking at providing good old fashioned factoring services with good service levels to small businesses. I am not sure how they are fairing but wish them every success.

We have also seen the team who were absorbed by Bibby when they bought Arbuthnot set up again on their own as Innovation Finance. It is very early days and by their own admission they are still finding their feet but I will be watching their progress with interest. Again I wish them every success.

16 Aug

The Long ‘No’ »

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In dealing with various businesses and lenders as an invoice finance broker the biggest frustration is when a lender takes a long time to say ‘no’.

In my position as a broker I always aim to manage any clients expectations in terms of what can be reallistically achieved in the market given their particular circumstances. In dealing with any lender I try and highlight any issues upfront so that our energies can be focussed on mitigating the risks associated with those issues. My aim in doing this is to be honest and maintain a solid reputation but also to avoid any last minute issues. If a lender discovers the deal they have been looking at for the last 6 weeks is not what they thought because of some ‘skeleton in the closet’ then it will come as no suprise that they may change or retract their original offer.

The flip side of this is when a lender is provided full information on day one and the risks have clearly being highlighted to them. Yet after 2 months of visits and negotiations they say ‘no’ and the reason given is what was flagged into them in the first instance. This is frustrating for the broker such as myself but for the business concerned can be catostrophic.

In the most recent instance of this kind I had a client who had breached a facility with the invoice finance arm of a major bank. There had been a number of fairly minor breaches over a 5 month period and as such the lender had given the client 3 months notice to find an alternaitive funder. I approached an independent lender and flagged in the issues asking at the end of my email, “Given these breaches could you assist?”. The lender assured me they still had an appetite to assist and that their credit team were on board. They went to various meeting and chased the prospect for a decision until he finally accepted their terms. A full pre lend survey was done a month into this process and the feedback was that the survey had gone well. However another month further down the line and only when I phoned for an update was I told the facility had been declined. ‘Why?’, I asked. ‘The client has breached his facility with the existing provider’, was the response. In instances like that you have to laugh or you would cry. However, the implication for the client was that in less than a month the existing provider would be looking for full repayment and as such his business was at risk. The lender concerned made apologies and moved on to tell another broker how their ‘national, local and personal’ presence is best for their clients. I have to say I disagree. This has only happened to me twice this year and both times, despite having the assurances of senior people, this same lender have dropped out at the last minute after a protracted process and have declined the deal based on something they were aware of on day one. The lender concerned will not be dealing with any introductions from me going forward having shown it is not an issue with individuals or regions but a company wide problem.

I am writing this to share an experience so that clients don’t make the same mistake. So how do you ensure this doesn’t happen to you? In time critical situations like the one I have described I think it is important to run at least 2 invoice finance companies in tandem through the application process. Be totally upfront with them from the outset and highlight any risks to them. This way they can look to structure a facility that meets your needs but also mitigates their concerns over risks. The time in working with 2 lenders until you have credit backed offers will be repaid in peace of mind and in ensuring you are not back at square one should a lender decide they no longer have an appetite to assist you.

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