Another strange lender linked to RBS

Seeking funding alternatives today, I had a conversation with a lender that is “independent” and “fully backed” by Nat West. This does have the ring of the “independent” but fully owned by Tescos coffee chain, Harris and Hoole about it.

In truth that is of no real concern to me but this lender is certainly independent from RBS/Natwest’s approcah to brokers.

They told me that they couldnt deal with my leads unless I was part of the “nat west panel of brokers”. Really? For a quasi independent that is a pretty deadbeat old school approach in a crowded market.

Quite how they expect to grow the business whilst manacled in this manner I do not know. I am not on RBS’s panel and given that they hardly stand out from the crowd, I am not going to go through hoops and pay fees to third parties who contribute nothing (they know who they are)

Brokers are sometimes seen as a unwanted intermeidary by a small minority of lenders but by chance I was discussing this very subject with a good contact last week. His employers tried to set up a loan product generating business purely by bypassing the broker market.

It was an almighty flop and its now being revamped with a view to a relaunch

Skype? No thanks

I was introduced to a contact that was wishing to engage with a view to sharing leads. He’s comes recommended by someone I know well and like so I was happy to meet and talk through some more

Eventually we talked and set about setting a date. Diaries didn’t seem to work out although I couldn’t quite grasp what the problem was. Then he came up with a solution

“Shall we Skype?”

“No”

Aside from the fact I am not at all a fan of video conferencing, I was and remain a bit concerned that someone wishing to build business does not grasp why direct face to face contact cannot be beaten.

We do not have to define why. We just know and its either that way or no way

Do business shows work?

In fact they do. Or they serve a useful purpose for brokers such as myself who are interested in seeing who is active in the market and new names that may just have passed me by. They are also very useful for collecting pens.

However im not convinced that the exhibitors chose the best staff to exhibit. My experience at the recent finance professionals show was distinctly mixed. A business loan exhibitor was fine but undynamic with little effort made to connect in what is a competitive market (and one where i am working on a number of leads) and a trade financier didnt even bother to follow up despite again my indication that I had a few things to discuss. I wouldnt even recognise them if I saw them now.

Worst of all one of the major independent lenders whos stand was very prominently placed near the entrance completely ignored me three times when I stood in the centre of their stand all but throwing my hands up pleading for someone to talk to me. Clearly personal calls on mobiles were more important. Its their loss

But it was nice to connect with a very decent equipment finance business from the north of England who are lovely to deal with and a variety of useful familiar contacts

 

Do we deserve bad presentations?

I hae not and never will see Steve Jobs as a guru but this comment is spot on.

Earlier this week i had to suffer an awful presentation riddled with inaccuracies which was simply read from a powerpoint for the longest 25 minutes I can recall. As an organiser of networking events im very concious that such presentations take up peoples time and that should be minimised but im also concious that attendees will not feed back honestly.

It was once commented to me (by someone I dont respect) that I looked bored during one  gratingly dull powerpoint torture. I replied quite straightfowardly that that was because I was bored, thank you very much

The trouble is that too many of us are afraid to show what we think. Its a pecularly English habit. A round of applause and smiles after listening to total rubbish for half an hour rather than a forthright honest appraisal.

Im not suggesting that the audience tap their watches meaningfully or start a slow hand clap but if you do not say what you think then you will simply get more of the same

 

 

 

 

 

Gloomy news on SMEs. Or is it?

For a few years now we have had regular reports from insolvency practioners that the business world is over populated with “zombie companies” who will collapse at the slightest hint of an interest rate rise.

In fairness the article does post some salient facts although perhaps but there are a couple of issues that i have with the following statement

The research showed that 448,011 businesses were experiencing ‘significant’ levels of financial distress at the end of the third quarter, up 27% on a year ago.

It said almost 250,000 of these companies (Q3 2107: 248,619) ended the period with negative net worth, representing a sizeable population of so called “zombie” companies that had managed to survive thanks to the prolonged low interest rate environment and flexible labour market, but which did not have adequate working capital to fund any growth or absorb rising input prices.

The most worrying issue is that the trend is upwards but it should also be remembered that in todays economy with its emphasis on tech start ups, a negative net worth is far from always being an indicator of potential failure. The reason being that most tech companies will be developing and owing debt to investors for many years before they reach the criteria required to satisfy the grey accountants of Begbies. I believe that this criteria would still apply to Amazon today.

Secondly there almost appears to be a lack of quantification of the impact of the rate rise (announced today). Its 0.25%. Most loans and borrowing will barely be affected. To put in perspective I will give an example

A small SME would perhaps have an invoice financing facilty of say £200k (typical for a £1m turnover business). Assuming they borrowed this to the limit all year (unlikely) a 0.25% interest rate rise would amount to £500 per annum. Thats around £40 per month

A business turning over £1m a year will not go into liquidation over £40 per week