Factoring Solutions Blog News, views and gossip from the world of factoring, invoice discounting and trade finance

Ultimate Finance plc have just announced their preliminary results for the year ended 30th June 2006 and they appear to have made substantial growth with 131 new clients being taken on in the year bringing their total number of clients to 230.

Client sales financed was up 49% from £82.5m in 2004/05 to £123m. Turnover for the period increased by 52% to just over £3.5 million and their profit was up from £21,000 last year to £290,000.

A good year for one of our preferred factoring companies

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We found that the enquiry level for for factoring in June remained at high levels despite distractions like the World Cup and summer finally arriving and whilst we had our usual crop of enquiries from companies dissatisfied with the service that they were receiving from their existing factoring company two of them in particular stood out.

A recruitment company had been with the same payroll funder for twelve months on what we considered to be very competitive rates but without any prior warning had received a letter stating that the rates would be doubling on 1st August. The MD was livid and telephoned us in high dudgeon about the way that this matter was handled.

The second company had lost a County Court case, not paid the debt quickly enough and had a CCJ registered against them. Factoring companies are always on the lookout for CCJ’s registered against their clients and whilst most factors in this situation would ask the account manager to contact the client and find out the reasons, in this case the factoring company just wrote to their client saying that they were withdrawing all funding until the matter was resolved and charged them £100 for sending the letter.

I think that some factoring companies have the attitude that once the ink on the agreement is dry they can treat their clients how they like but it’s a short sighted view as the market is very competitive and if these factors don’t want any clients there are plenty of others that will look after them properly.

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FDA – what is it good for (with apologies to Pink Floyd).

Many brokers, introducers and accountants etc when discussing factoring will advise companies to select a factoring company that is a member of the Factors & Discounters Association which I find rather strange. The FDA is a trade association who’s prime function is “Promoting and representing the interests of members” according to the logo plastered all over the home page of their website and has nothing whatsoever to do with the protection of the interests of the 40,000 businesses that factor or discount their invoices.

The FDA used to publish a code of conduct for it’s members but this seems to have disappeared from their website. Most of this code of conduct is probably not of great interest to the general public with the exception of the clause stating that members should not place undue obstacles in the way of a client that is unhappy with the service and who consequently wishes to transfer to another factoring company.

This clause used to amuse me as one of the major bank owned factoring companies had a reputation for being “awkward” with clients that wanted to leave to such an extent that other factoring companies were forced to complain more than once to the FDA who seemed unable or unwilling to do anything about it.

Posted under factoring, factoring companies