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Complaints

30 Nov

Invoice Finance Brokers Owned by Insolvency Practitioners – Why? »

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There seem to be several invoice finance brokerages appearing that are linked to insolvency practitioners. Only today I was asked by a client of mine why this was so I thought a post may be due on the topic.

In short the insolvency practitioners see the invoice finance leads that give to lenders as a carrot to attract insolvency work from the lenders. In fact some of the IP owned brokers will only give leads to lenders if they give them insolvency work in return. I have seen some e-mail marketing from one such broker offering 2 new deals to a lender in return for a ‘fee generative appointment’.

Reciprocity is a buzz word in many industries these days and the invoice finance industry is no different.

However, in my opinion it does raise concerns for business owners who approach these brokerages looking for independent and impartial advice about factoring or invoice discounting. There is every chance that the business will simply be placed with the lender that they ‘owe’ a deal to. If this is the case it means that they are not really acting in the best interests of that client.

15 Oct

Factoring Company Complaints »

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As an invoice finance broker it is interesting to hear the complaints I hear from clients about invoice finance companies. Some I may add are totally unfounded and relate to the invoice finance company not agreeing to an overpayment or something that they shouldn’t have to do. However, some seem to follow a common theme and these were highlighted in a forum by the Federation for Small Business.

I want to explore some of the themes that were raised:

  • Hidden costs and unexpected fees – it would be fair to say that not all invoice finance companies are as transparent as they could be in relation to fees. We often see agreements where a minimum base rate is hidden in the small prints. Lists of dispursements are also rarely shared at first meetings which makes comparison of facilities almost impossible. On that basis headline rates can be misleading as some companies have virtually no additional fees.
  • Restrictions on funding. I think this complaint often boils down to a lack of understanding on the clients part and poor communication from the lender. It is imperative any company entering into an invoice finance agreement understand what invoices are eligible for funding. In my mind I believe that should be explained properly by the lender at the outset.
  • Termination fees. This seems to be a thorny topic at present and relates to the fees charged should you wish to leave early. The justification of these fees relates to the fact that the costs of setting up a facility are typically incurred either at commencement or even precommencement by the invoice finance company. As such it takes the contract period to recover these costs and turn a profit. Should a client look to leave early then they incur a loss. However, fees such as arrangement fees, legal documentation fees and survey fees have crept into the industry. On that basis surely the initial set up costs are paid for by the client upfront. If this is the case I am not sure early termination fees can be justified.
  • Collect out fees. This is a fee applied to the ledger upon the failure of the business. Some lenders apply a 15% fee the gross value of the ledger when the company fails. Is this excessive? In some instances most definitely. I saw a bank (one that is now government owned) charge a collect out fee on a ledger where there was actually no borrowing. The implications to business owners is often minimal and it is creditors and often HMRC that lose out on the funds being taken. However, where there is a shortfall and a personal guarantee has been given it could cost the directors personally.

I am sure that there are more complaints from many clients but overall I would maintain that the vast majority of invoice finance clients are happy. there is obviously always room for improvement.

From my perspective it just seems a shame that the same invoice finance companies get mentioned time and again and seem to become notorious for certain practices. It can give the industry at large a bad name.

05 Sep

Factoring No Minimum Contract »

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Factoring agreements are typically for 12 month periods with either a 3 month or 6 month notice period.

However, there are companies offering factoring with no minimum contract.

You could opt for a trial period, a rolling 28 contract or a rolling 3 month contract. Smart Factoring Quotes can help you access all these types of agreements.We will also explain in full the fee structure so you have a full understanding of what you will be paying.

We understand the invoice factoring market and all that it can offer. We also understand the frustrations that businesses face when looking to set up these agreements. We understand how to get you the invoice finance facility that you want.

10 Aug

Factoring Company Complaints »

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As an invoice finance broker I speak with a lot of businesses who are looking for cash flow solutions for their businesses.

It would be fair to say that their is a real mixed reaction towards invoice finance and especially factoring. A lot of this relates to the perception that factoring is a last resort and I would argue that this is certainly no longer the case.

However, having read various posts on several forums their seem to be some common complaints about factoring companies. These include hidden costs, actual prepayment not been as high as quoted headline rate, reserves and retentions, lengthy contract periods and poor service levels. Unfortunately in a lot of cases I feel that this business owners do have a valid case.

Another area that received a lot of publicity on the FSB forums is the hefty collect out fees and early termination fees that can be levied by lenders. These can often be totally out of sync with the work load required to collect in any outstanding debts and many view these charges as opportunistic.

If you have any valid complaints and you wish to air these experiences we will accept posts on this forum – please use the comment box below. However, we will not allow “witch hunts” so please do not name individuals and please try to stick to the facts.

16 Jan

Factoring – Common Complaints »

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Factoring – Common Complaints

Speaking to business owners on a daily basis there seems to be some common complaints about factoring services, factoring companies and the process involved in setting a facility up. I wanted to visit some of these:

Over promising and lack of transparency at the outset – invoice finance companies are typically sales driven and as such the individual sales people are targeted to close deals. This can in many instances lead to promises being made that simply can’t be delivered. There are also instances where perhaps certain costs and restrictions are not as well explained as perhaps they should be. This can be very frustrating when a business has signed up for a 12 month contract and they are not getting what they expected. The industry remains unregulated and as such once pen has been put to paper and a contract signed it is hard to get out of an invoice finance contract. The key is to understand up front what is on offer and the help of an invoice finance expert can be useful.

Hidden costs – quite often all the costs involved in a facility are not explained. Headline rates can be deceiving as they can detract from the total costs involved. Such hidden costs include minimum base rates, disbursements, minimum service fees, arrangement fees, audit fees, etc.. It is imperative total annual costs are compared when looking at different quotes.

Poor service levels – when factoring you are paying for a credit control service as well as a finance facility. It is important you understand what this service includes as some lenders will simply send out automated letters and month end statements and in many cases this may well be enough. Some lenders will actively chase debts with telephone calls which will yield a better result. Service levels also include the general administration of the facility and if not done properly the facility may not perform as you had expected. Some lenders are notorious for poor service levels and should be avoided at all costs.

Lack of communication – most business owners are used to dealing with what is thrown at them but if factoring companies change goal posts without advising clients this makes it harder. There are a couple of invoice finance companies who I could name where I know a client is unlikely to return a call. I know because I have had the same complaint from several clients and unfortunately I have experienced it myself at the hands of the same factoring companies. The reasons behind the lack of communication includes; employees being over stretched, simple lack of service focused approach at the lender, arrogance and simple bad manners. It boiled down to bad service and again we have some notorious culprits who say one thing and do another or simply never say anything at all. To avoid bad service do your homework from the outset and select an invoice finance company you can trust. Seek references but remember that lenders will only put you in touch with happy clients. Look on forums and blogs to see what you can dig up but remember passionate bloggers will typically always be the ones complaining and there are typically two sides to very story.

06 Jan

Close Brothers Invoice Finance Reviews and Complaints »

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Would you like to review or provide feedback on your experience of Close Brothers Invoice Finance? Reviews are at the bottom of this page and links to some interesting articles and blogs below.

It is probably fair to say that if you are looking for a provider of invoice finance there are better options out there in terms of pricing, structure of facilities and customer service levels. In terms of reputation there are also better options in our opinion. The reviews however will speak for themselves so please take a look at them and feel free to contribute your own experiences.

Close Brothers Invoice Finance are part of Close Brothers Group Plc and provide invoice finance solutions to over 1,000 clients. They are a national player with full UK coverage. They also offer invoice finance facilities in Ireland and Northern Ireland.

They are one of the larger independent invoice finance companies with offices in Brighton, Manchester, Dublin and Belfast.

In our opinion, more common complaints about Close Brothers Invoice Finance include their lack of flexibility, charges such as minimum base rates, their arrogant approach and some people have described them as ‘unapproachable’.

Complaints below highlight their attitude, the poor quality of their system and the high fees some clients are charged for funding which is often restricted.

Read more:

An independent blog post about Close Brothers putting a business into administration – click here

Article on Close Brothers Invoice Finance pricing – click here

Article regarding a restrictive facility structure – click here

Trustpilot makes for some interesting reading – click here

It also appears there is a blog dedicated to Close Brothers – click here

Close Brothers also feature in an article on complaints about wealth management companies where it states, “Close Brothers also features on the list with 169 complaints, but its complaints are related mostly to banking and credit with none related to investments.” While this is not linked directly to the invoice finance arm of Close Brothers we find it interesting as it gives a feel for the overall organisation and what they might feel is acceptable. For the article – click here

An extract from one Trustpilot review reads, “AVOID AVOID AVOID….

When making a complaint no manager or person of authority bothered to speak to me directly then they say they are just closing my complaint down, when I said I’m not satisfied with the outcome, you don’t expect a large company such as this to just ignore customers, in my opinion this company is slimy and deceptive and lack the ability to treat customers fairly.

I’ll wait for the standard message they send saying they are sorry I feel this way, if they were sorry they would of dealt with my issue when they had the chance.
AVOID AVOID AVOID”

 

If you would like to share your experiences of Close Brothers Invoice Finance please feel free to do so but please try to be objective and refrain from abusive remarks.

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