The State of the Factoring Marketplace

The factoring marketplace seems to be changing with far less activity happening than in the past. Companies looking for working capital to fund expansion are few and far between as few companies are expanding at the moment and with many of the major factoring companies losing large numbers of clients due to their inability to ride out the recession, the overall market is contracting. Most of the factoring companies are reacting to the changing marketplace…

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Ultimate Finance Increase Business by 50%

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…

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Factoring for Small Companies – What we can do for SMEs

There are factoring facilities available for smaller companies – typically with an annual turnover of less than £300,000 and funding requirements of less than £50,000 available on very competitive terms. To make life as simple as possible there are no set up charges and rather than separate charges for factoring commissions and interest there is a single bundled fee of typically 3.75% of turnover. A further plus point of this facility is that there is…

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Non Bank Lending at it’s Highest for Five Years

As bank lending continues to decline it has been reported that asset based financing to the SME sector, including factoring and invoice discounting, is on the increase according to an article in today’s Financial Times. The chief executive of the finance brokers association claimed that “there was still a lack of awareness among small businesses and their advisers on alternatives to bank loans” and that the commercial finance brokers’ association, which compiled the data from…

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Factoring and Insolvency Practitioners

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 Practitioners? We…

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Is all Well at Close Invoice Finance?

Close Invoice Finance used to have a good reputation for service but things seem to have changed in recent years since the new broom took over the hot seat as we are hearing about rumours of discontent amongst staff to the extent that senior staff are leaving, substantial losses being taken in one of the regional offices and a very hard and inflexible line being taken with clients Unfortunately when this Factoring Solutions Blog was…

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Factoring and the Credit Crunch

Although it seems that the big bank owned factoring companies are feeling the pinch at the moment the level of enquiries being received by Factoring Solutions is still being maintained. It is traditional in times like this for the larger companies to tighten up their own liquidity by slowing down payments to suppliers and this in turn is causing the smaller companies to look to factoring or invoice discounting to free up their own working capital. We are also…

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Independent Factoring Brokers

I read on a fellow factoring broker’s blog a warning about the so called independent advice received from some brokers and giving a warning that not all brokers gave independent advice as the ownership of the broker might dictate that introductions be made to factoring companies that suit the broker more than the prospect.The prime culprits would be those broking outfits owned by insolvency practitioners who are fond of introducing leads to those factors that…

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Sainsbury Helps the Factoring Industry

Sainsbury has been named and shamed by the Forum of Private Business for having increased all non-food supplier payment times from 30 to 75 days. The giant supermarket has joined other well known names such as Dell and Argos who have also changed their payment terms retrospectively. I guess that we can all expect an increase in enquiries for factoring services from Sainsbury’s suppliers now just as we did when Alliance Boots did the same…

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Alliance Boots Screws it’s Suppliers

The pharmaceutical retail giant with 3,000 stores in the UK has horrified it’s suppliers by writing to them all to change their payment terms to 75 days from the end of the month in which the goods have been delivered. This means that they could be taking credit of over three months for anything delivered in the first half of the month. To add insult to injury, not only are Alliance Boots asking their suppliers…

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The Perils of Non-Recourse Factoring

Two reports in the same week concerning one of the well known high street bank owned factoring companies and their non recourse facilities. One of their factoring clients suffered a reasonably substantial five figure bad debt which was underwritten by the factoring company and as a result the factoring company reduced the credit limits on the remaining customers refusing to fund any account in excess of the new limit. The company found it difficult to…

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Interesting Announcement on Factoring from FPB

It was recently announced that The Forum of Private Business (FPB) had concluded an agreement to introduce their members to Cattles Invoice Finance as they claim to have negotiated special discounted rates with them. One of the claims being made is that “the discounts we have negotiated with Cattles will save our members an average of £3,000 in the first year.” It would be interesting to know on what basis this claim has been made…

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A Quick Change of Factoring Company

We were approached yesterday by a company who had an invoice discounting facility with one of the well known independents for a short while but who had upset them by not passing on a substantial payment from a customer. This had been discovered in audit and the factoring company were so upset that they told their client that they had three days to repay the total investment otherwise an Administrator would be appointed. The only…

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Factoring Solutions in 2009

I guess that with the banks’ reluctance to lend money and the general state of the economy it is only to be expected that enquiries for factoring and invoice discounting would be running at high levels. In the first two months of 2009 Factoring Solutions received 62% more enquiries than in the comparable period last year. The biggest change in market sector so far has been in recruitment which has historically been the mainstay of…

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The Recession and the Bank Owned Factoring Companies

We have been receiving an alarming number of enquiries from clients of RBS Invoice Finance complaining that the goalposts have been moved with factoring facility limits slashed as well as a number of other actions taken that were designed to reduce the amount of funding available. Yesterday’s enquiry was from a company that had been factoring with RBIF for 10 years and had always enjoyed the relationship until recently, complaining that not only had the…

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Bank of Scotland Flounts British Bankers Association Recommendations

The Chief Executive of the British Bankers Association together with Lord Mandelson told the first meeting of the Government Small Business Forum two days ago that: “The UK’s leading banks are committed to helping Britain’s businesses to weather the economic downturn” and that: “The UK’s banks want to see their customers flourish even in these testing times. We are determined to help our customers make the most of their businesses and part of that is…

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Factoring Brokers do not Always Act in the Clients Best Interests

We had an enquiry yesterday for spot factoring / single invoice factoring and having discussed the nature of the company and it’s precise requirements we recommended one particular spot factoring company as being the most suitable for their particular requirements. The company wanted the initial discussions to be done by email and as both parties copied us in on the exchange of emails we could see that at least three from each had been exchanged…

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