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Invoice financing Fraud. How it happens
A useful piece here in the FT and sometimes its useful to remind clients who are understandably impatient with the various checks taken out by lenders, how prevalent fraud has been in the Invoice financing market.
The article is clearly triggered by Greensil, which has been superbly reported by the FT and is also likely to throw up a lot more dirt.
I can recall being approached by fraudsters at least four times and they often have a convincing take to tell. Fortunately in each case, I was able to spot the irregularities and alert the lending market. I also took note that in each case, other brokers had greedily passed the leads onto lenders without even cursory checks
That might be me sounding a little holier than thou but attention to detail is essential for all sides
Business Recovery loans. Up and running and points to consider
Finally it appears that the scheme is up and running and in many ways there appears to be some greater flexibility with eligibility. Certainly there is thought to be greater scope for MBI and MBO funding.
The delays were frustrating and in truth the responsibility was largely with the British Business Bank and their mixed messaging but thats now in the past
I am working with a number of clients to enable the lending and here are a few points to consider
- Fees and interest will be payable from the first day. There is non of the grace period allowed to CBILs
- As with CBILs, lenders can charge up to 15% apr. This isn’t necessarily cheap lending
- Your high street bank will offer the best rates. As a broker, that is far from self serving advice because but thats the truth of the matter
- If you cannot complete with your bank or they are simply slow, then there are options with independents
- Invoice and equipments financiers will offer the next best rates but you will have to take their products as part of the package. This is an area where I can certainly assist
- Compared to CBILs, there are fewer lenders
- Be very careful with the clauses. One high profile fintech (as referred to in my earlier post) has a very restrictive clause which could be very damaging to your business.
A less than charming Trade Financier
A couple of years back I met a partnership who provide Trade Finance for “small businesses and SMEs”. I met them at a Broker event hosted by a major lender and this being a rather specialist area with very few players, I thought it worthwhile to make contact
By chance I had a lead and called them. I might have been called many things in the past but not inarticulate and I thought I explained the proposal well.
The attitude and response was the most patronising and simply rude I had experienced in ten years of brokering. Without question
A line went through their name and they were largely forgotten about until last week when I met with a challenger bank that has a relationship with them. This senior guy said that one of his clients, who is level headed and not precious said, “do not send these gents to me again”. Ive altered the actual description slightly…
Trade Finance has always been a narrow field and lenders come and go rather too quickly, with Scottish Pacific being an unfortunate high profile departure in recent times but no one should ever take their position for granted
But there are some new players in the market and i’ve found their approach to be quite excellent. There is one in particular that is impressing me.
Today I have alerted two banks that have relationships to this lender (who’s clearly have far more Cons than pros) to the competition. Its nice to reward good service and hard working relationships
No lender in any sphere should take their position for granted. The hubristic approach will always alienate and come back to bite.
Is this prominent “Fintech” lender ethical?
Perhaps their TV advertising should appear more akin to the above ?
A very high profile lender which has been offering CBILS and now surprisingly been adopted to the BRL scheme, has been inserting clauses into the client agreements preventing the borrower taking on any additional lending during the duration of the CBILs loan, without their permission. Effectively this is a charge that isn’t a charge.
Thats fine if the permission is granted or at least addressed although the way it has been inserted into the contract has been seen as pretty unethical but i’m hearing that they are simply not replying to requests
Shall I name the lender? Think of their initials and how they match the phrase that many investors, brokers and borrowers use to describe them. Fondly ? Cuddly? No Friendly Gents? No.
They will argue that everyone has a chance to consider the terms but they should perhaps think again. Although this isn’t regulated in the manner of the consumer market, terms can still be deemed “unfair” bye the courts. I recall a prominent building supplier finding that a well disguised clause that was effectively a personal guarantee was ruled as invalid by the courts
This will be and has already been causing ructions in the industry and expect it to be legally challenged very soon
In the meantime, I would strongly advise against anyone taking out any commitments with this lender
Business Recovery Loans. A launch like the Titanic
It’s been well over two months since the “launch” of the BRLS and most lenders still haven’t worked out their criteria for eligibility.
This is a bit of a shambles with clients of mine queueing up and somewhat baffled by the shoulder shrugging responses. A great deal of the blame lies with the British Business Bank’s instructions apparently muddled as well as the necessity for tiresome and protracted “audits” of the lenders (albeit necessary given the Greensil shambles) but also the lenders themselves appear to be pretty unprepared.
Why is this?
I have a theory and leads back to our current circumstances. It’s very much down to work from home or should that be “work” from home. A few heads knocked together in an office and things get done. There is peer and management pressure to do so. Soporific zoom calls and being slumped in front of Countdown do not count for productivity
There is an absence of energy in the lending market at the moment. Another good example is a lender where my excellent contact recently retired. The replacement I know well and is experienced. The communication so far?
“are you close to Staines and are you around next Monday at 11”
Fairly and no was my reply. You would assume that it would be to their advantage to meet up
In fairness, I do not get swayed by meeting lenders and I rigorously stick to exploring the market without prejudice but its useful to know who’s doing what
Not heard a peep since and this is a few weeks ago from a invoice financier that claims to be aggressively expanding in the market with new investment.
WordPress. A shambles
Last year, WordPress changed from the “classic” input to “Block Editor” and believe me, it is hard work
Im unsure whether I will be posting through this platform going forward. The interface is way too difficult to use and functions such as posting images and quoting from articles appear top have suddenly become a major battle
This is a classic case of not being able to leave well alone. WordPress worked. Now it simply doesn’t.
Some idiot trying to justify their inflated salary by making change for changes sake and alienating the client base
Im not IT illiterate or an expert and ill try again but im not hopeful
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