RLS loan extension

Have heard that the RLS scheme is to be extended but even this late in the day, there are no details to hand

I have noticed that many “fintechs” have seemingly been very keen to close off the current scheme, some well before the deadline.

Perhaps an indication of a lack of appetite going forward?

An Invoice Discounters ludicrous credit assessment

Sorry but i’m not going to name the lender although I may drop a clue. The reason is that they have reversed their original decision following some fairly strong minded lobbying from myself

A “single invoice” client of mine was rejected and one of the reasons given was the credit rating of the debtor. Credit ratings vary enormous of course and the quality of the rating will be reflected in the agency that is used. It is safe to say that thus credit agency wouldn’t be may idea of a safe option.

Either way, the rating should only be a guideline and any underwriter should surely be able to look beyond the agency ratings. The agency they were showing upmost faith in had in the past given a £2m rating for a business on the very day before its well publicised and heavily signposted collapse. Again I would not describe their ratings as safe

The other side of the coin is that good business is turned away because of ludicrously inappropriate ratings for perfectly decent clients. And this was the case here. The client was given a limit of only £13k and the lender stated that they stuck rigidly to the agency’s ratings. Interestingly when discussing this issue with another lender, they became rather evasive too, which was telling

So why was this rating “ludicrous” in my eyes? The clue is in the photo of the very grand and beautiful Leeds town hall accompanying this piece

The client was a Local Authority

The end of Government backed business loans ?

Sadly for many businesses this would appear to be the case. Four weeks ago the CBI asked for the RLS loan scheme to be extended and since then there has been nothing other than silence. Its is due to expire on the 30th June and many lenders have already signalled their final deadlines for applications

In truth many in the lending industry will welcome this. It has been a boost for certain Fintech lenders, at least one of which was struggling badly, but more mainstream lenders saw business taken away from Asset Finance arrangements. In addition, the process and criteria was often confused and lenders varied enormously in appetite. Furthermore, the lending frequently wasn’t always cost effective with rates up to 14.99% being allowed and often imposed.

Maybe there will be a last minute announcement but the signs are not positive. Government support in the future may well be more geared towards targeted grants and subsidies and we will have to see how these pan out. Support is likely to be targeted towards energy costs with manufacturing a serous focus and in truth, few could argue with that

Business Banking Resolution Service. What happened?

Not much apparently but that hasn’t seemingly prevented ample reward for their “part time” Chief Adjudicator

For those that cannot link to the Times piece, Alexandra Marks received nearly £1m for resolving cases over a period of under three years. Maybe some will see that as fair value if the service was dynamic and made considerable progress where there has been a lack of support for small and medium businesses in the past, although such a reward for a part time role is pretty lucrative by anyones standards. The service was set up following a whole range of lending scandals by the banks which have been widely reported and by anyone reasonable persons standards, pretty disgusting

So how did this new body perform? What were the results of their efforts? With “708 cases registered with service at the end of last year” you would expect some activity and a range of settlements.

There were settlements during this time so the body which employs 33 people at a cost of £3.7m million wasn’t entirely ineffective. The question of course is how many settlements resulting in financial compensation were there?

Five..

You have read that right and the whole body is now under scrutiny by the Commons Treasury Committee which has called for it to scrapped for its “pitiful lack of progress”. I think “pitiful” could even be putting it mildly and in the light of the substantial financial reward for their “chief” a few other words spring to mind

The big four and auditing. My quotes in Accountancy Age

Flattered to be asked for my views on the latest developments within the leading accountancy firms and the audit profession by Accountancy Age, which its the foremost website for accounting news

No need to say more but you can access here