Bad Debts and Factoring
Factoring Solutions were approached by a company turning over £4m with the benefit of a non recourse factoring facility with one of the bank owned factoring companies.
Having suffered a substantial bad debt the factors were loathe to fulfil their obligations and pay the client anything as the balance was above the underwritten limit and it took quite a lot of “persuasion” before they paid out the insured amount.
To rub salt into the wounds the factor insisted that an independent accountant be appointed to run the slide rule over the company to ensure that they were still solvent and debited their account with £6,000 to pay for it.
The company quite naturally felt that the client / factor relationship has been destroyed and despite the fact that it will cost them a significant sum to switch they approached us to find a replacement facility with a more commercially minded factor.
Not only have we done this but we have also sourced a six figure trade finance facility to run in conjunction with the non recourse factoring facility as well.
The other interesting aspect to the the above case history is that it was the third company that had approached us within the space of two months complaining about various aspects of the service from this well known bank owned factor.