Archive for February, 2015

Late payments hamper construction

According to findings from Bibby, 53% of construction firms cite late payment as a serious issue. This is not surprising even though some might cynically that with a product to sell,”they would say that wouldn’t they”. On the other hand I might have expected the figure to be worse

As discussed here previously, construction has a uniquely bad name and many main contractors treat sub contractors disgracefully. Everyone in the industry knows the score and who the culprits are

But it needn’t always be so. A firm that I am currently assisting and is growing at a rapid rate has managed to arrange for 14 day payment terms from some of the biggest names in the business. The guy that runs it is very shrewd and knows full well that if you don’t ask you don’t get. Do a good job and they will look after you

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Is it worth taking Stock?

timber_stocksHad a discussion with a young accountant yesterday regarding balance sheets and largely around the issue of intangibles. In fact I had an example last week of an intangible which was pretty laughable whereas the other hand, as previously posted, intangibles are far too readily dismissed by many credit analysts

He mentioned stock as an item and had clearly been trained to put a high value on this. I suspect this is down to rather outdated tuition at certain institutes because the fact remains that stock is often hopeless.

Firstly with “just in time” the norm these days, why carry excessive stock? And if doing so, why are you lumbered with it? Doesn’t speak much for its value

Secondly retention of title blows a hole in its value. Whilst that naturally also reduces creditors in liabilities, there are likely to be penalties imposed by the supplier.

Lastly, whatever the value, the sale of it in the event of administration is not exactly going to be geared towards sticking around to get the best price. It will most likely be sold at a fraction of book value. Or end up in a skip

Of course the industry is the driving factor here with many industries being stock relatively stock intensive and stock that is a virtually a commodity, such as timber or oil, would be a better bet than printed material say

As ever, the devil is in the detail but an assumed book value is a very dangerous game indeed

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An “introducer”? No I am not

A have just received an invite from a leading lender to an event for “introducers”. I will attend and I am certain it will be interesting but I do have an issue with the description

Does it matter? Yes of course it does. The job title should reflect my work and I do not under any circumstances “introduce” leads to anyone. Under no circumstances could I present myself to a client as “an introducer” and it is the client I represent, not the lender.

I am there to assist and manage the process and make sure that the lenders compete for the best facility and price as well as service. That does not mean that I simply pass on a phone number and walk away.

It is about time the lenders understood that some of us are pure brokers and take pride in our work rather than lazily passing off clients to the last lender that brought you a drink

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Market update. Invoice and Trade finance

It is maybe a good time for an update on the current invoice and trade finance market. You will have to accept my apologies for not naming names or giving direct indicators as to who is doing what. Frankly that information is for me to know and for you to hopefully exploit. Fortunately the last two months have produced more leads than in any previous similar period, which is in itself striking given that December and January are traditionally slow. I would like to believe this is due to my commitment to service being fully appreciated in the market.

Enough of that and here are a few observations

– A high profile lender has taken a couple of hits which has led them to reassess their lending criteria. However, despite rumours, they are certainly not “closed for business”. That I can verify

– Another major lender took a very heavy hit which has resulted in quite a row between their uk arm and parent. This has taken the wind out of what had been a strong push for new business

– The number of lenders active is continuing to increase. Does your account or broker explain to you there are over 50 options? Significant new players will be seen this year and one recent entrant in the south is proving to be very active indeed

– But bad deals abound. I have just heard of a business that has signed a “3.9% per month per invoice arrangement” with a major bank and is regretting it to the extent that they may cease trading. Of course it is caveat emptor but the requirement for brokers has never been more significant.

– The option to use online facilities continues to appeal. The rates are dropping and the criteria shifting in the right direction and this is a real challenge to established lenders. But there are possible fault lines

– Trade finance is becoming more competitive. I am receiving a number of enquiries and there is slightly more scope than previously although the options are not what they could be. However a couple of lenders are proving to be very enterprising

– Expect a major push for business from an american lender with a presence in this country. They have hired and extremely well respected and well connected friend of mine as managing director in the uk

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Some more Southgate images


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Southgate Tube Station


Off to meet a new client last week. A lovely business looking for invoice financing and certainly the arrangement I have in mind will facilitate a great deal of growth. Nothing new there and nor is there anything special about a trip to the outer reaches of North London. Southgate is a very pleasant suburb with much to recommend it but you would not describe it as particularly distinctive in the manner of Chiswick or Dulwich perhaps.

But it does possess something quite extraordinary. The Tube station. It is perhaps the most highly regarded of all the capitals underground structures, which is some feat when you consider the variety and quality.

It is quite special. It has been described as a flying saucer which has an element of truth but at the same time it is both distinctive and yet unimposing. The interior is perfectly preserved and is beautifully designed. Even the escalators have a genuine touch of class.

For more history and detail see here but the key is to see it for yourself. Just 30 minutes central London and its not as if you have look hard to find the building when you get there. Worth the trip?


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Losing patience with Greece

HADDAD_greece_0I can’t help thinking that this weekend signaled the beginning of the end for the euro. The
Greek prime minister does of course have a mandate for the stance he is taking but equally the tone is going to grate right across europe. Quite difficult to see how the northern european electorates are going to take to further cash for Greece to rehire “public sector workers that were illegally fired”.

This can only produce one result. Alan Greenspan elucidates the thoughts of many.

“The problem is that there there is no way that I can conceive of the euro of continuing, unless and until all of the members of eurozone become politically integrated – actually even just fiscally integrated won’t do it.”

Frankly I despise Greeces stance. The euro is in my opinion a failed concept but whilst a large proportion of the blame will lie with the incompetent management of the whole structure, Greece is a disgrace in its denial and arrogance.

So what will be the effect of the exit of Greece? This piece gives a good indication with four economists spelling out the dangers. It does not make for comfortable reading

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