Archive for June, 2014

End of Wonga? Lets hope so

it would appear that there could be real grounds for criminal prosecution. If so, the company should be suspended from conducting new business until the outcome of the trial. The “compensation” and penalties imposed thus far are hopelessly lightweight but thankfully the publicity should do untold damage to their prospects. If there was ever a business that i would love to see fail, this is it

Here is a legal view

Wonga could be investigated for a string of criminal offences, from fraud to falsely impersonating a solicitor and even blackmail, says lawyer Dan Bunting.
It is a crime under the Fraud Act to dishonestly make a false representation, intending to make a gain or cause a loss to another, when you know it is false and misleading.
The Solicitors Act of 1974 makes it an offence for someone to falsely claim to be a solicitor – although there is usually a six month time limit from the date of this particular offence.
Wonga could also be charged with blackmail under section 21 of the Theft Act 1968 – as a threat to take people to court could be regarded as ‘an unwarranted demand with menaces’.
Mr Bunting said: ‘So, whilst “blackmail” conjures up connotations of masked men making a ransom demand after a kidnapping, this may well be close.’


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Wonga disgrace

What a truly vile company.

Using fake lawyers letters and then charging the debtors for doing so? How low and cheap can you get. Absolute pond life

They have received a £2.6m fine. Not enough. Their licence to trade should have been revoked immediately


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Asset based lending booming

Up 16% year on year and fivefold in a decade. Extraordinary figures in many ways but not unexpected given the logical drift towards this form of lending

it is worth quoting ABFA on this

“We’ve entered a new era for business funding, where asset based finance is an everyday part of the commercial finance toolkit for businesses of all sizes.

“Financing tools like these have already been commonplace in the United States for a long time, and have played a key role in funding the recovery for a lot of businesses in sectors like manufacturing. We’re now seeing big British businesses following their lead, and using asset based lending as a vital part of their growth plans.

“There are a lot of UK businesses who are seeing opportunities for growth, whether through taking on large new orders, investing in their R&D programmes, or recruiting new staff. More and more of them are now borrowing against their assets to fund that expansion.

“There are general concerns about the availability of finance for businesses and the consequences this could have for the recovery. The asset based finance market in contrast – while it has grown sharply-still has unused capacity, and providers are actively looking to grow their lending books.”

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The Disappearing Face of New York

Whilst researching a for an illustration for my newsletter, I came across a series of photos of old New York Shopfronts.

From what would appear to be a fine book here

And a full range of pics on flickr here






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After the Music Stopped

9780143124481_p0_v2_s260x420-1If you were to pick one book on the recent crisis, which would it be? There are of course the fine narratives by the likes of Gillian Tett and the excellent overviews by Paul Krugman for instance but for me the stand out has been this gripping read by Alan Blinder Aside from the excellence, wit and clarity of his writing, his explanations of some of the more tricky to follow aspects of the saga are as concise and illuminating as you could hope to find. it is far from a dry read too. His opinions are strong but well balanced. By explaining in an often exasperated fashion the political angles to much of the decision making, the human element is very much to the fore. But that is balanced with a clear an illustration of QE2 as you could hope to find He was a former advisor to Bill Clinton and his views certainly veer towards Keynesian solutions but there is a genuine political balance Even if you feel that you have read quite enough on the crisis, I would certainly not pass this by.

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State of the market. Some observations

OLYMPUS DIGITAL CAMERAInvoice financing is probably a very indicative bell weather for assessing the condition of the SME market. Who is seeking finance?  Who is lending to who?

Naturally as an independent broker I am working with a pretty small sample but even here there is a trend. Currently I am working on six deals and they all have something in common

None are with an existing lender. All bar one are seeking finance to expand operations.

One is a very interesting start up and four are timesheet contractors. Two of those are overseas businesses expanding into the UK. The exception is a large contractor in a CVA. A challenge for which i have found a solution

The trend here is clear of course. Rather than trying to move lenders to save a few quid or because the existing lender is simply being awkward, the potential borrowers are looking to the future in terms of developing rather than cost cutting



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Insolvency regulators given “more power”

And about time to, many would say

Many a frustrated creditor would have experienced disgust at the manner and handling of certain insolvencies and in my previous role as a credit manager in a number of industries, I can certainly cite certain past instances of abuses. 

You may assume that these abuses invariably involved backstreet firms. Think again. Worst example i came across? Think big arrogant  firm and think right at the top of that list

Myself and a handful of other creditors had little recourse at that time. The details of the new proposals are not clear at the present time and how powerful the regulators will prove to be is open to question but maybe at long last, there will be somewhere to turn


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