We have long been dubious about the ever increasingly cosy relationship between factoring companies and the insolvency profession with factoring companies seemingly ever more likely to appoint Administrators to their clients and insolvency practitioners in turn setting up broking divisions to introduce new clients to the factoring companies in a mutual back scratching exercise which benefits everyone except the poor client of course.
Is there a Parasitic Relationship between Factoring Companies and Insolvency
We went so far as to set up the Association of Independent Factoring Brokers in an effort to highlight the fact that many brokers might not be offering the unbiased advice that they claim but the Factoring Blog has recently commented on the campaign being conducted by the Asset Based Finance Associates who seem to be quite intent on bringing this parasitic relationship to the attention of as many relevant authorities as possible.
Interestingly enough I’m not the only industry insider to express disquiet in public on this subject as whilst researching this post I came across Mark Byrne of Calverton Finance’s blog post on exactly the same subject.
Talking to other brokers and factoring company personnel it’s obvious that many feel the same way but as the insolvency practitioner owned broking outfits (and one in particular) steadily increase their grip on the factoring industry no-one wants to rock the boat so they will continue to sup with a long spoon in private whilst publicly impersonating Nelson with his telescope.