Archive for November, 2013

RBS and small businesses

RBS_2551057bI was asked at my networking do last night what the perception of RBS was amongst my clients and the overall market in light of this weeks news

What could I say?

What I will say is that a bank that is effectively owned and frankly owes its continuing existence to the taxpayers, including those very businesses affected by the bank (lets be polite here) “policy”, really has to get its act together. I am staggered that what is probably a very small division with the organisation has been allowed to even give the slightest hint of this behaviour

The guy who asked me was from… RBS

And you can understand why. Without doubt this affects his ability to attract new business. Not just because a business believes that they may be treated in the same alleged manner wi would add too

I know some great people at RBS but they have been badly let down

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Universal McCann Should know better


UM are one of the biggest players in the media buying world and you would have thought a respectable name. Unfortunately they have acted in a particularly charmless manner with one of my clients. I will keep it brief but here was chain of events

– UM placed an order for advertising to be run on behalf of its client 

– My clients t&c’s were accepted and the advert ran. Transaction complete

– UM then send a mail stating that their terms and conditions must be agreed before they “issue a purchase order”

– No payment will be made with the PO. Blackmail

– Their terms include a “paid when paid” clause (and a couple of other “unreasonable” terms). This was completely unacceptable to my client

– Paid when paid means my client is expected to wait indefinitely and also take on the credit risk of end client

So what did we do?

Hit them hard. They were emailed and told in no uncertain manner …. well I keep the details to myself

What happened? My client was accused of “an aggressive approach” (the irony) but suddenly they found a new set of T&cs without the rogue clauses.

Funny that


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Blockbuster. Lessons learnt


The least surprising business failure this year is Blockbuster. Surprisingly bought out of administration a few months back, it has collapsed again. Here is a decent article

What do we learn from this? Firstly, as a credit manager, when judging a business you have to look a lot further than the last filed accounts. This is always an issue with credit reporting and why i will stress over and over that such reports are merely the starting point for a decision

And here is the most interesting paragraph

In 2000, Blockbuster’s American parent company, bloated and complacent from the spoils of such success, turned down the chance to buy Netflix for $50m. Today, it is worth an extraordinary $20bn.


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Co-op shambles

6c6696de-40b0-11e3-_469339cHere is a very interesting piece by Robert Peston on the shambles behind the virtual collapse of the Co op bank

Simply put the bank was effectively run by a “political appointee” with absolutely no banking experience. Bafflingly this was approved by the FSA

It could be retorted that Fred Godwin had banking experience (although as a recent book explains, he was really an accountant with little grasp of risk) but that wouldnt really be the point. Bob Diamond was certainly vilified and yet his overall record was very strong.

Peston adds this as a footnote

I am told Flowers used his platform as Co-op chairman to increase his influence with senior members of the Labour Party. He was on a finance and advisory group set up by the Labour leader, Ed Miliband.

Quite what he was able to advise is difficult to fathom and this hardly reflects well on labour

Running a bank is a huge task and yes, the renumeration is eye watering but that is the market as it stands and frankly the risks of inappropriate appointments made simply to placate certain viewpoints are enormous

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The invoice financing market. An update

As many of you will know, I extensively broker invoice financing arrangements and a key to success is knowing who is doing what as well as who is hungry and who is pulling up the drawbridge. Beyond that you have to deal with the quirks of the underwriters and they certainly do vary and baffle at times

Can i give you a definitive picture? No. No broker can. With over 40 active lenders that would be impossible but I do pride myself in keeping in close touch with virtually all the players

Naturally enough I am not going to give away details but here is an outline of a few trends I have spotted

One major bank is still treating some clients in a baffling manner. They seem to have little appetite for support even towards well established and financially sound SMEs. However one other major player has awoken from a seeming slumber and is is very hungry for new business. Their rates are very competitive indeed

Another previously significant player barely seems interested in new proposals and finds it difficult to even return emails whilst another is attempting to transform a slightly difficult image.

The obsession with personal guarantees is quietly being set aside by a couple of lenders. Quite right too and in my eyes this adds significantly to their appeal. Many borrowers will pay a slightly higher rate to avoid these (often unnecessary) demands and rightly so. Lenders simply don’t get the emotional impact of PGs

It is no secret that Metro bank have taken over SME finance and I will be keeping a close eye on developments there. The peer to peer lenders such as Marketinvoice are still aggressive in the market and have adapted their model in response to clients requirements. Good thing too

The single invoice discounting market is still short of players but as one lender I know very well has found, it is a significantly growing area

Interestingly the leper sector, construction, is being actively courted by a small number of lenders now. One in particular is very keen

As for the governments “supply chain finance” which was supposed to counter the need for external financing (see previous post), there is nothing to report.

That is as much as I prepared to tell you but, of course,always feel free to contact me 

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RBS “poor lenders”


There will still be many querying why, what is effectively a state owned bank, is being criticised strongly by the state for not lending sufficiently to small and medium businesses.

It is not perhaps as simple as that and state owned is not the same as state run but somehow there has to be a sea change. This stat is pretty extraordinary

According to research by consultants Oliver Wyman for the report, RBS’s share of the small business lending market has fallen from more than 40pc to 27pc and will continue to decrease over the next five years by close to 10 percentage points over the next five years unless something is done to arrest the decline.

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