Archive for December, 2016

My predictions for 2017


Predictions for 2017

As yet I havent reviewed my predictions for 2016 but I believe they were relatively in line with expectations.

So what to expect from 2017? Here are a few random thoughts

1. The recent alleged high value and rather stupid fraud perpetuated by the owners of a small failed factoring business will have a marginal but maybe significant adverse effect on investors in the invoice financing market

2. There will be a significant new entrant into the peer to peer business loan market. The market is a little dominated by one very successful lender, but that in itself will invite greater competition

3. At least two invoice financers have shown a distinct lack of appetite over the past few months. The market is perhaps a little overcrowded and there may be a few gentle withdrawls.

4. It might finally come to pass that one of the major banks will release some or maybe even all of their invoice fnancing book. Rumours persist

5. There will be further convergance between the products offered by the PTP lenders and the “conventional” lenders. The market is far more diverse then just 5 years ago and this is good news for us all.

6. There be a greater degree of business investment caution as we get closer to Brexit. But this will be less significant than many anticipate

7. The Commercial Mortgage market will continue to be flat

Happy New

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Clueless credit ratings part 2

Credit management is vital to businesses not just as an insurance against bad debts but also as tool to ensure that good business is not turned away. This week I came across an example of a credit insurer without the imagination or foresight to back a very strong prospect

The request was to enable invoice financing for a client and fortunately I quickly found alternatives but the orgininal financier lost a very good piece of business

They lost it because they would not back a newly formed subisdiary of one the UK’s most successful retailers. Genuinely successful rather than simply high profile

The retailer had invested at the very least, £8m in this subsidiary. My client was looking for a modest limit of £40k

As my client rightly pointed out, why on earth is a major business valued in the billions going to let a small new subsidiary go to the wall after just having paid £8m for the business and invested considerably more?

If this credit insurer cannot grasp that then what are they for?

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The best and worst of networking


Most of us who have struck out on own have needed to network extensively and intensively in our early years. It can be a minefield and there are a lot of wasted evenings and mornings but also some great productivity, often when least expected

As some of you may know, I co founded and continue to host a very successful event but over time I have also, rightly or wrongly, become more choosy about the events I attend. Heres some reasons why and some also some random observations.

  1. Can you go to too many events? Im afraid I believe that is the case and whilst some attendees (including a good friend of mine) are actively professional networkers and respected as such, others appear to simply have not much else to do. Or are not really able to do much else
  2. There is an element of “lonely old men with drink problems” at certain events, which shall remain nameless. It is remarkable how many people belive that they can seriously build relationships by slurring away and droning on at three in the afternoon. Even in the evening its not exactly appealing and at a early morning event it would be rather worrying.
  3. Do the early morning events really work? Do you really want someone shouting at you at 7.15am? Supposedly these are held at ungodly hours because the attendees have a “a full day ahead of them”. Arguably, if that was true they wouldnt need to network. More likely they are heading home for 8 hours of daytime tv.
  4. Do you spend the whole of a football match telling your neighbour about your latest work issues and business deals? No?  Good, so dont try and spend a networking event trying to talk football with me.
  5. There are less “business coaches” and “life coaches” than before. Thank god
  6. If you are paying a substantial fee or a ludicrous suscription for an event or so called club, ask who the event is run for the benefit of?
  7. The right venue is vital. Hotels are often the worst with a handful of people rattling round a drab windowless “function room”. Accoustics are more important than many realise too
  8. “Presentations” can be hell. I was once subjected to a 20 minutes by some dismally unfunny idiot representing a taxi firm . I was more likely to burn his taxis to the ground than hire him. A few minutes at most please
  9. If a presentation is boring then let them know. I suggest a slow handclap myself but more subtly you can just start talking amongst yourselves. They have no right to your interest.
  10. Attractive young ladies (lets use that desription) at these events are there for a reason.  They are there to sell and as a rule the  more cleavage the worst the product. So its not what a leering old bloke with a beer splattered tie wants to believe. And never will be.
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EFG Loans and the EU

official-bureaucrat-eu-border-control-immigration-politics-economics-ban-no-employee-officer-warns-controls-69216018You may or may  ot be aware of the purpose of the EFG loan but heres a concise description

The Enterprise Finance Guarantee ( EFG ) is a loan guarantee scheme to facilitate lending to viable businesses that have been turned down for a normal commercial loan due to a lack of security or a proven track record

A decent initiative of course and one that has served some of my clients very well but there are barriers of which the high street banks rather tepid enthusiasm towards this lending is often very obvious.

But unbeknown to me, until last week when a client of mine was refused, there is a bigger obstacle

The following restrictions, described in more detail below, arise from the EU de minimis regulations:

  •   Aid for Export
  •   Using EFG funding abroad
  •   Preferential use of domestic over imported goods
  •   Agriculture (including horticulture)
  •   Coal
  •   Fisheries
  •   Transport

    For eligible cases, as the EFG guarantee has made the difference between failure and success in accessing finance, the business is deemed to have been assisted by the Government, having received a “State Aid”.

    Like most of forms of SME assistance, EFG operates under the de minimis rules which specify that the maximum assistance which may be provided to any SME in any rolling three-year period is €200,000.

So there we have it. Simple lending towards SMEs who export (and it doesnt matter how much they export) is deemed as “state aid” by the EU and barred.

Make of that what you will but many will contend that assistance with lending is barely state aid and frankly its none of the EU’s business

And the thought crossed my  mind that quantative easing whereby banks are effectively injected with cash to lend, surely amounts to the same thing?


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How dare they?

Although I have yet to see the letter in question, I have been told that a major bank has written to many of its clients instructing them that the notice period for their invoice financing facility has been extended from one month to three months. From this detail, those that know the market well will probably ascertain who the lender is.

If this is true this is a disgrace. Whilst im not a lawyer I would be fairly certain that you simply cannot alter such a fundamental part of the contract without agreement.That must surely be the case? It would be akin to advising a client that a tied in contract for 12 months has been unilaterally extended to 24 months

Banks have to act commercially of course but they should also be more aware of their public image, which is frankly terrible. Respect will not be garnered by scams such as this.

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