So which big four bank has not underwritten an invoice finance deal since….

Or should I say “banks”?

For the moment I do know that one particular bank has not written any new business since….

April

Another is writing virtually no new business and of course you may well ask who is who here

Suffice to say that I am not going to disclose the information simply because it will be met with inevitable denials and rebuffs but have every confidence in my spies. A good question would be to ask what on earth the sales teams have been doing for six months although the lack of underwriting is hardly their fault

What we do know is that we are likely to see quite a lot of movement in the market for the foreseeable future. Banks not willing to write new business tend not to fight to retain clients either

Is it grim up north?

This blog steers clear of politics but politics is life and naturally the news stories will overlap. Thus Andy Burnham’s statement that the north is facing a “worse economic crisis since the 80s” needs examining

My family’s roots are in the north so I’m certainly not one of those who believes the world ends at Watford. Also I am currently dealing with a number of clients from across the Midlands, Cumbria and Lancashire.

To my mind, Burnhams’s statement is total nonsense but why does it matter? The key here is confidence. If you start talking your town, city or region down then investors might start to believe what they will hear and the area will increasingly be viewed as a desperate source of dispirited cheap labour as well as a perceived image of victimhood.

The second probable issue is that of crying wolf. Are the recently thriving cities of Leeds, Manchester and most strikingly Liverpool suddenly going to revert back to the deprivation which was a feature of the worst years of the 80s? Because of what has been less than a year of downturn but one that has been mitigated by huge support by the Government ?

Times are tough but a perspective needs to be kept. Liverpool didn’t quibble about the HMG support or tough lockdown and has responding strongly to the mass testing and is now in Tier 2 after a pretty spectacular reduction in cases whereas Manchester remains in the toughest lockdown.

Burnham’s tactics of coming out swinging at HMG was perhaps good for his personal profile (never far from his mind) but strategically was less than thoughtful.

Why a good website is vital. A case study

Earlier this year I had my website redesigned and in would strongly recommend Stirling Austin of Pixelexecutive who did a terrific job in every single way whilst addressing every aspect of my requirements thoughtfully

You can see the results here.

Why does this matter? My previous website was not a disaster or particularly out of date but over the last few days I’ve found that yes, websites do actually make a strong initial impression

I have been managing a large development finance lead. Its not my area of expertise but I hopefully know the right people to bring together and because it is based in Scotland, there is a requirement for specialist knowledge

Through. trusted contact, I was in one step removed contact with a Edinburgh based Financier (apparently). No problems there, but the website…

Appears it was deigned in 2004 but it looks shockingly dated for even that time. If I posted it here, it will simply attract laughter not leads

Aside from the nostalgic design, the information is sketchy at best and quite frankly, myself and my client have distanced ourselves

Maybe this is a truly strong professional contact but why add the website to emails when its such an embarrassment?

Are invoice financiers losing their way with “work” from home?

Certainly not all. I am fortunate enough to have been managing a few decent leads and the responses have generally been good but not as good as they could have been

I am just finding that certain Business Development Managers are not responding as quickly as during more normal times and sometimes calls are not being returned at all. Thats a cardinal sin in the highly competitive world of asset financing

There is also some reluctance in the market. Some lenders are clearly finding the most tenuous of excuses not to look at prospects and others have hiked prices (alarmingly so in one significant case) but in these cases, slow responses haven’t always been the issue

Also I know of one or two BDMs who are clearly overworked, so there’s two sides to this coin

Its is also true that information is not flowing well through some organisations. I have one very simple question that needs answering by an underwriter thats been sitting on a desk for four working days now. We’ve now moved on

My take on this is as follows

1. Out of the office and out of the routine, some people are simply letting standards slip.
2. Certain BDMs are overwhelmed but being remote from the office environment, the message isn’t getting back to their bosses
3. The support network internally at invoice financiers is flagging in some cases.

Naturally I am not going to name names and maybe us brokers are rather too used to a high level of responsiveness but potential deals are certainly passing certain lenders by.

P2P CBILs. Under attack

There has been some adverse publicity surrounding the interest charged by independent lenders and specifically P2P lenders for CBILs. The sector has hit back and readers can make their own mind up on the content of this piece

I can see both sides of the story but there are a couple of observations that I would make. Firstly the upper limit allowed by the British Bank is 14.99% APR. Surely that’s excessive? This leaves the scheme open to criticism from borrowers who may feel they’ve been misled

More importantly is my observation from one significant case and more widespread interaction with lenders, is that the lending is just seen as lending regardless of circumstances. Businesses that really have a strong COVID case are being dismissed. In fact one lender actually laughed in my face when I mentioned a client off mine was in hospitality.

In fact the self same client (rightly) received CBILs from Barclays bank after being turned by every P2P I can mention (I may expand on the detail in a future post)

It could be argued that Barclays are at least sticking to the spirit of the scheme whereas others most certainly are not

“Unfair” lockdown rules

This blog has tended to avoid discussion regarding the lockdown rules because its a very subjective experience dominated by many factors which are more driven by personal circumstances than any other factor. Those that rarely visit pubs (myself) will find it easier to call for their closure than those for whom it’s the main social outlet (and are we right to sneer at the lonely old guys passing the day in a Wetherspoons?)

A dispassionate practical view should be taken and we all know what a mess Wales made of their regulations but, in my opinion, England has also blundered

Closing “non essential” retail simply boosts the big online players and this at a critical time. Also there are overlaps as rightly pointed out by Clinton Cards

This isn’t an discussion where I feel there is much room for debate.Retail should simply be allowed to open and HMG should change the ruling immediately.

Argos wont be missed

The news that Sainsbury’s are going to close all the free standing Argos stores will not come as a surprise. The disappearance of their famous catalogue last month signalled the end and if ever a business was going to struggle against Amazon, this was it. It’s difficult to see what Argos can offer that Amazon cannot and significantly Amazon can conversely offer an awful lot that Argos cannot. This was always predictable and the chain was a somewhat surprising purchase by a perhaps not too visionary Sainsbury’s

Will Argos be missed? By some yes but not by suppliers. Their contracts for supply were so notorious that most invoice financiers would not fund them as a debtor. In fact at least one clause in their contract, would quite easily have been taken apart in a legal setting on the basis it was “unfair”. Having said that, I do have a tale of a shocking underwriting experience involving Argos and a number of lenders, which I will describe in a future post

As for Amazon, I have yet to encounter a Financier who will fund them as a debtor and their reputation for paying on time is good with contracts which are tough but fair

CBILS extended again