Factoring Solutions today
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 factors in recent years with quite a few of our enquiries coming from new starts in this industry. So far this year we have received just five enquiries from this market sector which is a much smaller proportion of the total than usual.
The average deal size has increased over last year and although the factoring and invoice discounting companies are looking far more carefully at the risk involved in underwriting new business we have managed to find a home for a steel importer turning over £20m and a manufacturer of extruded window frames turning over £20m with a factory in Poland as well as a whole host of smaller companies.
In addition to invoice finance we have also taken an increasing number of enquiries for trade finance including a wholesaler currently discounting his invoices with one of the independents and turning over £10m a year who wanted funding for purchase orders as well as a watch importer turning over £38m looking for import finance and a publisher of video games with annual sales of £10m who was looking for a letter of credit facility.
Whilst the funders are being considerably more careful than in the past it is still possible to place the more difficult deals as evidenced by the renovator of housing turning over £5m and about to enter a CVA which we found a home for.