Archive for December, 2015

Invoice financing.No more hard sell

At a recent dinner I shared a table with a number of representatives from a very high profile invoic financing provider. Good company and enjoyable afternoon but I was struck by a number of impressions and conversations.

Invoice financing still has an unfortunate image in the eyes of many potential borrowers. Past behaviour and reputation has certainly damaged the sector and my belief is that there could easily be double the number of borrowers if the industry had promote itself in a more responsible and professional manner. Things have greatly improved but old attitudes do persist

A couple of the account managers I spoke conveyed the impression of straight forward salesmen more attuned to flogging cars or double glazing rather than a absolutely vital component of a businesses future success. One in particular with a cheesy grin and a less than impressive grasp of the industry I could never contemplate putting in front of a client.

I have also recently met another account manager from the self same lender and his approach was far too geared towards making unsubstantiated promises with the simple view of getting the borrower to buy into a facility under any terms. The client was very unimpressed and even with my presence ensuring a certain level of professionalism.

Furthermore I know a senior manager from the lender well and he is exceptionally hard working and astute. We had a conversation on this very subject and his view was that he wanted a team of young eager hungry sales people. That’s fair enough in the short term but I rather forcefully told him that this is the very last thing a competent broker or client wishes to see.

Many business owners will laugh off or simply shrug shoulders at the stationery or insurance salespersons patter. Neither commodity is vital to his business

Invoice financing is very different. A good or bad facility can make or break a business. This is a serious matter and the devil is in the detail. Every base has to be covered because one error, misunderstanding or misrepresnetation can be catastrophic

Rightly my clients expect professionalism and straightforward clarity from lenders. The majority understand this but a minority cannot seem to grasp that this is not a matter of getting the dotted line signed regardless but is a vital long term relationship which requires strong trust and management

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Francis Fukuyama



Fancy a rewarding New Years read? One that goes some way towards explaining the world as it stands today and in a very engaging manner

Fundamentally this is an exploration of why different societies succeed or fail in different ways. The emphasis is on political order which musnt be confused with political regimentation. Quite the contrary with freedoms governed by efficient and workable structures being the basis for any successful model.

Illuminating examples are plentiful. The chaos of Nigeria. The under achievement of Argentina. The legalistic tradition of the USA. The drift towards cronyism and nepotism in Brazil and India and the reasons why. The list is extensive and fascinating

It is clear that the structures of the state go a very long way towards underpinning the economic prosperity and the author sounds some warnings for the future . Particularly aimed towards the usa

However the book is fundamentally optimistic and I believe essential reading for anyone who wishes to grasp the world and understand the sometimes baffling contradictions across nation states and their successes

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Predictions for 2016


As much as this is very much a time of year to relax and forget the trials and tribulations of the world of asset finance it is also a good time to reflect and consider the year ahead

Having said that you may well think I would be better advised switching off but I can’t deny that I do find the whole business of finding the best solutions for clients and getting to know their business fascinating and rewarding

So what do I expect to see in 2016?

First of all the peer to peer online portals will be tightening up a little on credit. Understandably they have sought market share with some inevitable results. That’s all part of maturing as a business and as I have said before, they are a very welcome addition to the market

The flexibility of options offered by these new entrants will continue to push the existing lenders away from onerous minimum on year contracts with long notice periods. Lenders and commission driven brokers will not approve but this is most certainly a strong option for clients

There are probably more active lenders than ever before with Siemens and Amicus being two notable additions. This continues to put pressure on lenders to offer something different and we will continue to see more new and innovative products

This will increase the importance of the role of the broker. It is virtually impossible to find the best option in a market of 50 lenders without market knowledge. The differentials between lenders have become more marked

Another welcome development will be continuing drift away from demands for unnecessary personal guarantees. The newer lenders appear to have a greater understanding of the impact of these documents and existing old school players in the market will be forced to accept that this is often a deal breaker.

There will be a greater appetite for export driven debt simply because more lenders have become more open to a market where the risk was often laughably exaggerated. The days when BP in Belgium was seen as an exotic risk shiuld hopefully have passed

Another interesting development is the dropping of the sales teams by one lender. Increasingly lenders are finding that clients are nearly always found through brokers or referrals. The business community frequently does not trust contacting banks directly

Finally I see costs remaining very competitive indeed.

Heres ts to a great 2016

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More advice on late payments

Fairly interesting article here from the always readable Real Business magazine. In essence the give you six tips to prevent late payments from clients.

Sound advice but not I would suggest, written by an experienced credit manager. There is a rightly emphasis on credit checking but no mention of chasing techniques and the fact that telephone chasing is by some distance the most effective method

Also there is the old chestnut of charging interest for late payment. Forget it. It is only applicable if you are blasé about losing the client and few of us are

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End of FIFA

imageBack on the issue of sport the welcome banning of Blatter and Platini from the game of football for either years has essentially brought the whole group of governing bodies to their knees. Trust in these seedy organisations is impossible and a complete overhaul is more than a necessity

So what to do? Essentially there are two problems with Fifa and these both revolve around money and more specifically clientelism.

FIFA generates huge sums of money. A large chunk of this is passed onto to various nations under the guise of ‘development’. Football is a very simple sport and arguably the very cheapest to ‘develop’ which raises the question of why development money is needed at all. After all most of the leading footballing nations didn’t exactly require outside financial help to develop the Messis, Ronaldos and Rooneys of this world.

Secondly there eyre is the bidding process which is of course a complete farce. The World Cup has too often been played in unsuitable locations with resulting whit elephant stadiums and clueless local crowds. Is there any manager, club or supporter who really believe that Qatar let alone Russia are ideal locations for a tournament?

Both the above processes (for want of a better word) are at the heart of FIFAs collapse. Development money is nothing less than a vehicle for buying votes.One would dread to wish to see the result of a full and proper audit. Rotating world cups is a farce and the bidding naturally leads to corruption

The answer? Take both factors out of the equation. There will be no development money and no bidding for tournaments. Frankly if you need ‘development’ money to finance the running of the cheapest and yet most profitable sport known to man then you need to have a good look at yourself. Or your colleagues bank balances.

Tournaments ts can simply be rotated around the nations with the existing infrastructure. Climate,  time zones and security being significant issues too

I believe a new organisation should simply be run by the dozen or so most powerful nations in the game. The criteria would be a mix of playing standards and tv money. This will naturally many throwing their hands up in the air but a situation whereby the Cayman Islands has the same power as Germany is untenable

These nations should break away and form their own tournament which otehrs would be welcome to join. Frankly they will have no choice because any alternative would be unwatchable and meaningless

This would  generate huge sums as before and the new body should get every available penny. But what happens to this

Not a cent goes back into the game other than the cover costs. The remainder is distributed under a charitable trust the anything other than football

If Zukenburg and Gates can do it, then why no football?

No Blatters. No Qatars. No enriched officials. And millions to deserving causes.

I rest my case

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Wimbledon gone to the dogs


If you are a follower of football you may well be aware of this news and if you are a follower of dog racing you most certainly will be.

Afc Wimbledon were formed by fans when Wimbledon FC relocated to Milton Keynes and reformed under the name MK Dons. It became a huge success story with the new club attracting substantial support and quickly climbing the non league ladder before reaching their dream of full league status, where they have remained ever since.

During that time the purchased Kingstonians ground and allowed Kingstonian to remain as tenants.The ground has a small capacity of around 3800 and the long term desire of the club and fans was to return to their “home” in Wimbledon. This dream would appear to be coming to fruition

All good one might say but for every winner there is a loser. Firstly arc Wimbledon have sold their ground to Chelsea fc with no guarantees made for the continuing tenancy of Kingstonian fc who have played there for over 100 years I believe. Secondly the site they are developing is the very last arena for greyhound racing in the London area. It will leave the sport homeless in the capital where once there were numerous tracks

Greyhound racing has been declining in popularity over the years with many tracks shutting but it does still retain a following. The stadium is also the home of dog racings biggest event.

Effectively two sets of sports fans are going to be left high and dry by Afc Wimbledons actions. That’s life of course but the club was supoosedly “fan based” and presented a fluffy image to the media who tended to treat them as such. The club has to look after its own interests of course but you can’t help thinking that they are charging ahead with little consideration and acting no differently to any other concern in this highly competitive business

They have every right to do so of course but the idea that somehow they are “different” has been shown to be nothing more than a myth of public relations



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Trouble in Jamie’s kitchen

imageJamie Oliver does tend to divide opinion between those who feel that he is a breath of fresh air in the food business and those that maybe find his self publicity and slightly sanctimonious attitude a bit tiresome. It is no surprise then that the press have seized upon his restaurants chains troubles 

From afar there would appear to be two classic factors at play here, both of which are red lights when it comes to credit assessment

Firstly there is the classic overexpansion. Not just in terms of actual restaurant openings but in the diversity of the enterprises. Frankly he has simply spread himself too thin and lost control. How many times have we seen this whereby an entrepreneur believes that a little success means that they believe they have the Midas touch? And how often do we see the grasshopper mentality whereby no project is seen through properly to fruition?

Secondly he has brought in a friend to resolve the problems. Aside from this persons dubious past it would appear that his actions have destroyed morale within the business with consequences for customer service in what is very obviously a client facing business. Furthermore his relationship makes it more difficult for Jamie to take an objective view and make changes. Precisely the scenario that nearly brought down Gordon Ramseys group.

It it fairly clear he should have taken dispassionate truly professional advice. You get the distinct feeling that that this is going to get a lot worse before it gets better





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