Spiv invoice financiers. Avoid and avoid again

This is Viv the spiv, who actually exists. In fact he is an act which must be welcome fun at certain events but believe it or not, with the addition of a eighties blow wave haircut to go with the cheesy smile and worst of all, the pocket handkerchief, he’s a disturbing close likeness to a business development manager I met from a major lender. It baffles me that a lender can seriously believe that the average business owner is going to be impressed by such tacky image.

A business associate of mine once claimed that I didn’t look ‘slick’ enough for clients without appreciating that his somewhat ‘slick’ and slippery image has probably alienated many potential clients. Naturally I do not turn up to meet clients in a football top and shorts but the silk pocket handkerchief will not be present.

Does such a profile develop trust? I doubt it but image isn’t always an indication of tacky poor behaviour and recently I have once again come across a situation whereby a new client of mine is being treated dreadfully by one of the new breed of small lenders who swarming the market. I hasten to add that I am certainly not against new entrants and very much in favour of new products and approaches to lending but there has to be a degree of caution exercised. This particular lender is one I’ve avoided in the past and their reputation precedes them. My clients dealings with them should be simplicity itself, but they are not

Most lenders abide by a ‘code of conduct’ which was developed by the ABFA body and whilst I will not bore you with the details and the nature of the body, it was surprisingly successful in routing out much bad behaviour and sharp practice within the industry. And frankly there was too much.

This particular case has resulted in a solicitors letter and you do wonder why a small lender in the market appears to be determined to develop a bad name for itself? Word gets around very quickly and of course, bad news travels faster than good.

Sadly it appears that bad practices are creeping back in and needless to say, it is essential for new borrowers to access genuine industry knowledge and experience of who’s who. Which is where I come in. Without the pocket handkerchief

Illegal businesses. The facts

Bagehots column in The Economist is always worth a read and sadly is only available behind a paywall but this weeks piece is an excellent take down of the present situation with the numerous black economy businesses which are seemingly thriving across the UK, often at the expense of the legitimate traders

HMGs seemingly blasé attitude to these abuses are in stark contrast to their obsession with illegal immigrants which is perverse given that these businesses are a substantial element of the attraction for those trying to work without being in any way traceable

Highlighted are three particular sectors. Those strange “American Sweet shops”, rag trade sweatshops and hand car washes. Apparently there are around 5000 of the latter and a survey found that only 7% were able to produce actual payslips and only 10% had insurance. They also say that the way too identify the legitimacy of the enterprise is to observe whether the workers are actually wearing boots or simply sodden trainers. Good point.Sweatshops are still proliferating and apparently only 3000 of the country’s 5 million businesses was actually investigated by HMRC for paying slave wages with a prosecution total of …… 16.

As for those strange “sweet shops”, its clear, councils have been trying their best to chase these out of town but whilst stricter identity checks are being required for company directors the government is apparently not guaranteeing Companies House any powers to prosecute, which surely defeats the object?

A boom for brokers?

Interesting stat from Bibby today that 70% of their new leads come from brokers or “introducers” (ill discuss “introducers” another time) which is up by 15% from the previous year.

This appears to be an impressive trend but there are caveats. Other lenders have quoted ‘off the record’ a steady 80% statistic and the previous percentage from Bibby might actually be seen as comparatively low. That might have been a reflection on their direct media campaigns that were active at that time but either way, with over 50 invoice finance lenders active, it does illustrate that the necessity for brokers is appreciated by businesses. Whether some brokers search beyond two or three lenders is another matter…

And they should do. A client is entitled to the best possible service and the asset finance market is full of huge variations. in offerings. Never more so than now. Thats what makes the role fascinating

It is also a full time role keeping appraised with the comparative offerings. Beware of those that claim to be “experts” in all forms of finance.

And lenders will know the value of the brokers role, even if it doesn’t exactly suit their requirements. Just today i’ve seen two quotes from a very reputable lender to two clients (one mine, the other not) that are vastly different in cost and scope.

I am bound to point out that my client has a significantly better offering

Credit Suisse. An isolated shambles?

There has been substantial coverage of the collapse of Credit Suisse and there is perhaps little to add to what is a disturbing event with natural concerns about contagion and the fragility of other banks. Assurances have been made but there is a sense of Christine Keelers famous quote, “they would say that wouldn’t they?”. However on balance it does appear to be a more isolated than not

Having said that there are two very different points that spring to mind and one relates to asset finance

Credit Suisse were the backers of Greensil and anyone who has read the excellent Pyramid of Lies will be fully aware that CS’s controls and judgements were chronically lacking. They took a huge hit but whilst that wasn’t the reason for the collapse of the bank, its surely indicative of a badly run organisation from top two bottom?

Yet again, ludicrously re-numerated bankers have failed in the basics of their “profession” and yet again they will be bailed out which brings us to the next point

If there is contagion and further banks have to be bailed out, what is the public reaction going to be? Banking is, by a country mile, the least respected sector of the economy and I imagine that various administrations are dreading the scenario of justifying “bail outs” in these difficult and stringent times.

That is the very definition of a Hard Sell

You are as good as your contacts

Is this true? I believe it is and in this closely networked world, who you associate with or refer and endorse, defines who you are

This is an area where we have all made mistakes. It is impossible to know precisely how someone will perform given any task but we do try to have a rough idea but even when we have a degree of confidence, you can find that people soon show their true colours. A dismal experience with a “turnaround specialist” (who is quite high profile) demonstrated that my initial slight misgivings and slight warnings I received about him were justified. More than justified…

That referral was in good faith and I will always consider the needs of my clients first and foremost. If I refer a very capable lawyer or mortgage broker and the feedback is as I hope for, then I have obviously gained credibility in my clients eyes. If I refer someone for the sole reason that they happen to be in the same tacky networking club, then the question has to be asked, who is really seeking to benefit? And thats even before we consider whether those at the top of their trade really needs to be in networking groups where everyone is shouting at 6.45am

The other delicate curse is the “lead for a lead”. I do not refer expecting leads back but clearly I hope to be prominent in thinking when all things were equal and vice versa but the client and task is the over-riding consideration.

It sounds simple but people often put their own short term perceived gain ahead of long term credibility and some have a slight habit of always considering the last person they met to be the very best they’ve ever met. Also, at the risk of sounding puritanical, heavy “socialisers” are liable to refer equally “heavy socialisers” who can only be recalled for their football conversation and being a “good bloke” rather than an accurate diligent sober professional.

Im lucky to know a good range of professionals across a number of disciplines. Unbelievably perhaps, I even know a truly excellent Business Broker

All my contacts tick the above boxes. They work in very much the same way as I wish to and are, in my opinion, ahead of their peers

Thats all I ask for

More Greensil trouble for Credit Suisse

This is the story which is going to run for many years to come and whilst the detail might be a bit dry for some, there are interesting unanswered questions, the most significant of which is what incentivised the Credit Suisse employees to take such extraordinary risks? Throughout the whole saga, catalogued brilliantly in the superb Pyramid of lies, certain parties have taken risks which are simply baffling.

Or maybe not..