Archive for March, 2011

World bank survey. Where to do business….some surprising results

The World Banks survey  across the worlds economies throws up some fascinating insights and some surprising results. And given that a number of the factors such as “availability of credit” “closing down a business’ “starting a business” are of interest to any credit manager or lender, i would suggest this is well worth a look

So heres the top twenty

Economy Ease of Doing Business Rank ▲
Singapore 1
Hong Kong SAR, China 2
New Zealand 3
United Kingdom 4
United States 5
Denmark 6
Canada 7
Norway 8
Ireland 9
Australia 10
Saudi Arabia 11
Georgia 12
Finland 13
Sweden 14
Iceland 15
Korea, Rep. 16
Estonia 17
Japan 18
Thailand 19

The UK comes out of this survey remarkably well. In truth, despite our slightly Arthur Daley reputation overseas, my experience over managing in many econimies is that we have a comparitively nimble and flexible business enviroment.

But wheres France, Germany and the Netherlands you may well ask? Well I will shortly upload the full list into the downloads tab but they are not so far out of the picture (although I would have expecting the enterprising trading tradition of Netherlands to have been higher than 31).

Perhaps more interesting is the position of the so called BRIC economies. China was half way down the list at 82 but Russia was 131. Brazil 135. India a pretty disgraceful 143 (below Malawi and Mozambique). These nations have a an increasing sense of their ow worth and economic influence but behind the confidence is their an element of complacency too?

and for more on India see my post India. Doing business?

Of the EU countries Greece is a shocking 115

There are 185 countries on the list and for the ghouls the very worst are nearly all semi failed states in sub saharan Africa, with the exception of Venezuela, which comes on at a terrible 173. Those who have little sympathy for socialist command economies will perhaps not be surprised

I will be looking closer at some of the detail in future posts.

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HMV break up

The latest news.

It would appear that Waterstones still remains attractive to buyers and I suspect there will always be a market for those that want to actually pick up and browse books. A CD is a CD and one DVD looks much like another but books do have a more tangiable appeal. And a kindle download doesnt quite cut it as a gift.

So often its on these seemingly small issues that future success or failure depends

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Small businesses to be exempted from audited accounts?

A proposal by Vince Cable apparently. I will find more detail shortly but heres a link to the head of the ICM’s blog with some strong opinions…

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Guest post from K2 Business rescue on Project merlin

From my friends at K2 Business Rescue. Certainly worth a read….

Their website is

Will Project Merlin Actually help Business Lending?

With so many companies in financial difficulties, will further loans be available to them following the recently announced agreement between the UK government and the banks, known as Project Merlin?

The government has reached agreement with the UK’s four biggest banks, Lloyds, RBS, Barclays and HSBC, plus Santander, to increase the amount of new lending to business. It is planned that £190 billion would be loaned to businesses in 2011, of which £76 billion would be loaned to SMEs. The portion allocated to SMEs is an increase of 15% from the £66 billion loaned by the five banks in 2010.

The problem is that lending to businesses will be on commercial terms that reflect the reduced number of lenders in the market. With bank base rates being so low, currently 0.5%, companies are being charged a huge premium with interest rates being set as 8 – 9% above the base rate. In addition to the interest premium, huge arrangement fees are also being applied where fees representing 5 – 10% of the loan are not uncommon.

Many companies are already so much in debt that they will not be able to justify such a loan. Banks like to see their loans used for funding growth or buying assets rather than repaying debts due to others. They do not want to effectively buyout a company’s liability to other creditors as this increases their exposure to risk.

While politicians see the macro-economic picture the reality is how it plays out on the ground. Here at K2 we are seeing the effects of policy decisions and we believe that one effect of Project Merlin will be for the banks to convert short term revolving facilities, such as overdrafts, into medium term loans. These will probably be categorised as new loans in the quota reports but they won’t actually represent additional, new funding. It seems that the banks continue to run rings around the politicians.

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Corruption update

Many of you will remember the Corruption League table I copied here last summer. In fact I probably received more emails on that subject than anything I have posted. So to keep us all up to date, here is the link to the updated table. Not a lot of change maybe but this time it is run alongside a democracy league table

And apart from some glaring exceptions such as Singapore and UAE, the indexes are remarkably similar. So what conclusions should we draw from this?

Comments welcome…

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The nightmare factorer

A very  good contact of mine has just left a factoring /invoice discounting provider for what would certainly appear to be very good reasons. Now whilst I cannot name this provider and fortunately I have not placed any business with them, ultimately I believe they are not going to fulfil what I believe my client’s requirements should be.

Easy to say all this of course and that should be the end of the matter, but its worth considering the reasons why;

1. This provider has a very high turnover of staff. Who wants to see a different account manager every six months. And why is the turnover so high?

2. From that I think we can assume a working environment which is more is more like Libya than Sweden, so will they continue to attract the most talented staff from elsewhere? I think not.

3. More specifically, when it comes to underwriting business, the underwriters only communicate with the sales people by email. They refuse to meet face to face. Is that really the best method to determine the genuine potential of a business and uncover those nuggets of vital information, good or bad?

I could go on and I often do, but financing of any enterprise is a very serious business. That doesnt mean that the relationship has to be as much fun as a wet Sunday in Stornoway, but there has to be a degree of stability and comfort.

I fear that this is a provider that is overly driven by the bottom line with a disturbing sense of panic in the air.

Would you like to do business with them?

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Inside Job

See the trailer

And what a fine documentary it is too

We may all feel that we have heard enough about or even know all there is to know about the financial crisis, but sometimes it takes a smartly done potted history and current critique to marshall those thoughts. Inside job achieves that in great style. The particular strengths of the film are the examination of  the longer term background to the crisis and the very concise (and often very funny) interviews

Further reviews here

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