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Archive for November, 2012

Shameless self promotion

November 28, 2012 1 comment

Its about time that i took a very short break from entertaining you with my pieces and reminded you of why i am here.

So lets imagine you have a client or just simply know someone who either has an existing invoice finance facility or is considering that option (not that there are many other available for raising capital)

A fine firm of commercial lawyers who will hopefully be using my services asked for a summary of why i make a difference. Here it is

Oh and my contact tel no is 07956 138895 email cpcm@live.co.uk

1. Understanding the client
With your consent, I believe that meeting the client to build a relationship and fully understand their business is vital to enabling the best solution. It is also a good opportunity to discuss the options within this often complex market

2. Knowledge of market
The invoice financing market fluctuates and each provider will have their preferences, strengths and weaknesses. I am in constant touch with all the lenders as well as independent assessors of the ABL market

1. Independence
I am completely independent from any lender. When finding the best possible option for the client, the whole market has to be assessed without prejudice.

2. Analysis
There are many aspects to any facility and so often crucial elements can be overlooked. Facilities can be frustratingly restricted because of insufficient analysis, both of current debtors and future requirements. The key is to start with the availability and then work towards the cost. Believe me, the small print is vital.

3. Credit management
With over 30 years experience of debtors in a wide variety of industries, I can offer substantive analysis and consultancy on collections and risk as well assisting towards preparation of a presentable case

4. Commercial background
My background is in industries such as IT, music and media. I have been employed by small and medium businesses, sometimes in challenging circumstances. I believe that enables an easier rapport with the client

5. Your clients time
I will carefully assess the options available so that the field of possible lenders can be narrowed down as far as possible. The client will only meet lenders who can confirm a genuine interest. I attend meetings with the lenders and ensure that communication is thorough at all times

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Business Money

For asset based lenders and brokers like myself, Business money is the bible, so I am delighted to tell you that I will have a couple of articles appearing in the next two editions. Hopefully i will be able to upload the PDF’s here

And for previous articles of mine, see Download Articles above

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Cold county court

A client of mine has obtained a judgement against a client. Its for a reasonable sum and the money is important to him.

All well and good. The next step would be enforcement and being a debtor with assets, he stood a good chance

He has presented his case well and explained all the charges. That should be enough

But apparently not. The debtor has asked for the judgement to be set aside. On what basis? Well that would be good to know and as I understood it they had to submit valid reasons to the court, but seemingly not. They have not communicated anything other than a verbal ” we dont know what the debt is for”

No matter that it was clarified in great detail in the original claim

Of course the court should tell them to get stuffed. But have they? No

My client now had to take a day to attend a hearing whereby the onus is again on him to explain the debt from top to bottom.

An absolute disgrace and to my mind the cartoon on the left explains it all

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Supply chain finance. A threat to invoice finance?

See here

This is the nuts and bolts of the scheme, announced by Cameron a couple of weeks ago

Supply-chain finance, which is sometimes known as “reverse factoring”, allows big businesses to notify a bank as soon as a supplier’s invoice has been approved. The bank, armed with the assurance the bill will be paid, will then extend a full, immediate advance of the bill to the supplier at a low interest rate.

This could be a solution for many SME’s difficulties with large clients and apparently

David Cameron announced that 36 firms including Tesco and BT are considering joining the likes of Rolls-Royce and Vodafone in providing a scheme which allows their suppliers to have invoices paid in advance.

All well and good but it will have to be seen who does actually sign up to this and whether the banks will be enthused about running a scheme which will presumably not be particularly profitable and will even cost them in reducing their clients requirement on their own lending

Leading on from that is the possible threat to the invoice finance industry. The scheme will be a lot cheaper than current options of financing but it may not prove to be an easy switch if not all your clients are part of the scheme

Another possible issue is whether the debtor will remain committed. If they withdraw, then the dependent creditor possibly be left high and dry and feasibly in difficulties. Further down the line is the possibility that a change in government would lead to the scheme being abandoned. Not every administration would be sympathetic towards tax assisted funding towards small businesses

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Comet crashes to earth

Hardly unexpectedly, Comet fell to pieces last week. I sense their demise will not be lamented, but although they are probably not as disliked as theie main rivals (you know who i mean) from whom i would not buy battery even if they were the last store for 100 miles

But this is a particularly ugly insolvency which seems to be dogged by bad publicity not least;

There is also growing anger towards Deloitte because of its refusal to accept gift vouchers and offer refunds on faulty products. A Comet store in Plymouth allegedly rejected a £500 gift card given by a charity to a four-year-old boy with cerebral palsy.

link here

Charming….

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Nightmare ….

Here is a cautionary tale, well illustrated by Munch’s famous painting, The Scream

This week a new client of mine was seeking £150k short term funding. A well established business that had got itself into a mess. How had this come about?

Well, the incurred a bad debt which i understood to be around £840k. Unsurprisingly, the business has collapsed

A further complication to this is that because the bad debt is so significant and seemingly so carelessly incurred, HMRC imposed an injunction against the proposed pre pack administration. Why? Think this through and think collusion

Thanks fully that now appears to have been lifted but how did this come about?

My client apparently took advice from their bank on the credit worthiness of the debtor and were assured that because they were a PLC, then they should be fine. Absolute rubbish and I hope he has this in writing….

The debtor was a new business and of course there is the whole issue of lack of information. No accounts to look at and no track record. That should be cautionary enough but look a little deeper and there then a snippet of information may well have averted the whole shambles

Directors will often be relatively innocently involved in businesses that fail and i personally do not take the view that it is a significant negative, In fact, the opposite could be argued. But when this becomes a serious track record, then alarm bells should ring, and guess what? Yes, a whole string of failed businesses with huge debts

So what do we learn from this? Some will say that risk is part of trading Some will say that credit reports cannot give a conclusive picture

I would say that in response that this is complete rubbish. There are frequently clues and an experienced credit manager will know exactly what to look for and how to form a wider picture. And it can be forgotten that this can equally be significant for giving comfort as well as raising alarms

As for risk. £840k?

I would scream too…

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