The most disliked lender?

A very high profile “fintech” lender to small businesses is not not paying brokers commission for loans that are renewed. They didn’t actually inform brokers of this change in policy (which is unique in this sector) so it was the brokers that found out through their clients. Apparently in one instance when the client rang the broker thanking him for arranging the renewed lending. The lenders response was “its our client now. That is very typically arrogant of these people who have form with brokers. To say that they are extremely unpopular throughout the market would be an understatement

This may well be seen as purely a broker issue but I am also hearing some severely negative feedback about this lenders attitude to clients.

Many might say that commission for renewed loans is the ultimate passive income but that doesn’t take into accounts the very hard yards that go into building your client base. Believe me, it takes years as any broker will tell you

Im a great believer in what goes around comes around.

And it will

Jamie believes insolvency makes him “more likeable”

I must first say that I have no fixation with Jamie Oliver and actually admire his stances and enterprise in many areas, but he can irritate and maybe he should think a little more before spouting off? The following quote from a US publication where they may be somewhat less dazzled by his personality is one that I suggest unsecured creditors do not read if they suffer from high blood pressure

“You don’t want someone who’s had success after success after success. You want someone like me”

The problem with Germany

I am far from phobic about Germany or germans. Its a country i’ve loved visiting and to my mind Hamburg and Berlin (especially) are two great and seriously underrated cities.

This weeks Economist highlights Germanys current difficulties across a handful of articles. It is fairly well known as well as a surprise (and disappointment) to many, that the UK economy is set to outperform Germany’s this year but this is not a competition and we shouldn’t gloat. Their troubles are our troubles

The article that grabbed any attention above all others was the stinging rebuke of German bureaucracy. The examples given were pretty hair raising but led me to reconsider thoughts around Brexit.

A very underrated factor in the Brexit vote was the general sense by many voters that they did not wish to see this country, where we are pretty streamlined with our paperwork demands (witness the excellent Companies House which works smoothly and yet provides more salient information publicly than any comparable Government portal), inherit the heavy blanket of EU bureaucracy and where Germany goes, the EU tends to follow. Their bureaucracy will be our bureaucracy and its not at all likely that France or Italy will offer much of a counterweight

This factor isn’t mention in the Economist article and maybe its overplayed but i’m a believer that culture drives everything. The British have a inherent and healthy dislike for too much Government interference whereas other nations tend to take an opposite view

This isn’t to state that Brexit was necessarily the best move but in the binary world of social and even mainstream media, there’s an increasing reluctance to appreciate the other sides point of view. The Economist is well balanced and thats why its a standout publication but the dreadful Alastair Campbell and papers such as The Observer are chronic cases of this malaise where I was half anticipating that Nurse Letby’s crimes would somehow be blamed on the vote in 2016.

And it should not be forgotten that anyone taking a close look at how the EU handled the Covid vaccination roll out, would surely reflect that perhaps despite having 40000 very high paid employees, effectiveness and speed are not the words that immediately spring to mind

Jamie Oliver again

I knew someone who know Jamie Oliver well and said he’s a genuinely nice guy. That’s good to hear and probably better than my judgement that he’s a bit sanctimonious and very irritating but there are many business owners who are certainly considerably less likeable of course.

Jamie is in the news again for having taken out £7m in dividends from his new enterprise (which is more or less a phoenix) whilst unsecured creditors to Jamies Italian ltd are being fobbed off with 2p in the pound. The first thought is “why?”. For someone so image conscious and really shouldn’t need the cash, you would think he would hold fire for a while? That would be the smart intelligent thing to do and whilst some might say that those words are not always associated with Jamie Oliver, you would think he would be taking advice?

There is sympathy for unsecured creditors but that has to be mitigated by their clear nativity. Jamies Italian ltd accounts were appalling and there for all to see. If creditors do not credit check, then thats pretty much their own fault. I would also be interested to see what credit agencies were quoting at the time too. Certain credit agencies ratings are staggeringly poor and to my mind its lunacy that people take the ratings as gospel. And that works both ways, with perfectly legitimate and well backed businesses often rated negatively

Another issue many will have with Jamie is that he’s tried to elect sympathy for his businesses predicament. Its all been a bit “me me me” and maybe he should reflect on quotes in the linked piece from suppliers who “hate him with a passion”. Certainly the quotes in the article from Jamie are all about how terrible its been for him etc etc etc.

Today there is a claim that he sacrificed £25m of his own money to keep “the business afloat”

If he did, surely that would be registered as Directors loans or am I missing something. There are no directors loans on the balance sheet or any visible cash injections through the P and l.

In fairness, I would look a bit closer if I had the time and had an interest and i’m sure someone will do so.

The findings would be interesting

Was Wilko’s failure karma?

Wilko’s failure has been well documented, as have the reasons why. Excessive competition in a crowded sector was clearly taking its toll as was a seemingly less than dynamic management which can often be an issue with “family” owned businesses. In fact there could be a whole chapter written on the possible increased risks where the directors have inherited their positions and wealth rather than having clearly earned their status?

One aspect of Wilko that has been overlooked was their recent history. I had recalled that their treatment of employees during Covid was reported in Private Eye and whilst this is not available online, a flavour of the firms practices were reported here in the national press and more here

Its a store I quite liked but its pretty hard to have sympathy with such cynical treatment of staff on the one hand and stunning stupidity on the other

Sometimes its the small significant clues that confirm a business is a mess. Perhaps it was there for all to see three years ago

Britains oldest businesses and the secrets of their success?

A fascinating piece in this weeks Times highlighted the UK’s oldest registered companies. This is spun out of an interesting looking new book (which I’ve ordered) which highlights the success of enterprises based on very long established foundations.

Back in my credit management days, the first piece of information I referred to when assessing a business is their co reg number. “Well established” is one of the strongest elements in credit ratings. Take the Birmingham based wire manufacturer Webster and Horsfall. Current registration numbers are in the 140000000 range. Their reg no is 35630. Registered in 1892, but thats not all.

In fact they are the members of a small club of 14 (that meets once a year) which is named the Tricentennial club. These are the select band of businesses which have been trading for over 300 years and include the bank Hoare and co, a Dorset butchers, Shepherd Neeme the Kent brewers and the Wine merchants Berry Rudd.

But don’t be deceived by the traditional image. Berry Brothers Rudd are at the cutting edge in their sector with massive investment in state of art distribution

So what do these diverse but exceptionally aged businesses have in common? The message is that they do what they do for love and not for a miserable obsession with costs, margins and the bottom line.

And these businesses are sound and strong. Maybe thats because they concentrate and love what they do rather more than the empty world of renumeration?

The slow death of Zoom?

And for many of us, Zoom calls (or Teams etc) can feel exactly like a slow death. I have been baffled by the zealots for this form of communication but I should perhaps be aware that for many people, the value of same room interaction is grossly underrated

I acknowledge that when contact is established, video calling can be just fine but for initial connections (which are undoubtably the most vital) it’s too frequently an awful tool. Yes it take time to jump on a train or get in a car but the far far more is achieved. In was strongly reminded of this yesterday during an important but very constructive initial meeting with myself and a prominent lender. So much was achieved in just an hour. And the often most vital element, chemistry, would never have been replicated over a video call

So this news shouldn’t really be a surprise, despite it being seen as somewhat ironic.