Cameron. Greensil. This is going to run and run

Having also read Rory Stewarts rather unflattering depiction of the somewhat entitled Cameron in his excellent biography, the temptation to relish his on going difficulties with the seedy/naive Greensil association, is strong

There are a host of new allegations including using HMG time and resources to promote Greensil to third parties in Saudi Arabia.

The Shadow Director allegation is perhaps one that would be difficult to pin down but there appears to be substantial reasons to believe that Greensil and Gupta’s trials have only just started and are going to become very public and hugely embarrassing for Cameron.

Having said that, its unlikely he will still be Foreign Secretary when that all comes to pass

The Greensil lobbyist resurfaces

Enough said perhaps

Personally I believe that Cameron is decent choice for foreign secretary and it should be forgotten that Churchill had a record of poor financial judgement before his premiership. Other politicians too have been involved in lobbying that was somewhat eyebrow raising

By all accounts, Cameron is certainly not lacking in brain power and hasn’t reached the lofty heights purely through his (very) privileged background.

How does that make his startling naivety surrounding this explainable? Anyone reading the excellent Pyramid of Lies would surely be baffled as to how intelligent people were so easily duped by this almost laughable virtual Ponzi scheme? The same of course could be asked of the high profile investors in the Vashi chain which has similar obvious hallmarks of fraud and will surely be subject to a criminal investigation soon enough

Greed is probably the best explanation but as in life, surely the evergreen motto “that if it looks too to be true, then it probably is” still stands?

And surely thats appropriate to the Foreign office as well as the world of debtor finance?

Want financing? Be prepared..

Im fortunate enough to receive many leads for financing requirements and over time, I have learnt much about how these proposals are presented and why this is significant

Approaches tend to fall in to two camps although there are overlaps between the two.

I will not dwell on proposals where there has clearly been virtually no effort made by the client to understand the business but suffice to say, a proposal where the client has looked through the accounts and assessed what they hope will be available and how it might work, is the ideal basis on which we can progress. No one has to be particularly financial orientated and naturally there will often significant gaps in the market knowledge and I am there to fill the gaps

This is vital because the assumption is too often that lenders only lend against balance sheets regardless of the quality of the people involved. Rightly they need to assess who is taking on the liability and this becomes particularly important when the sums are significant. They are simply not going to send £5m out the door to someone who hasn’t even looked at their balance sheet.

And this is where the first contact is vital. Im not expecting a powerpoint presentation (god forbid) but also i’m not going to explain exactly what i’m looking for except to say that a business owner or potential business owner, should be pro active in their approach and not passive

Leadership takes many forms and some can and some can’t. Lenders consider this to be a vital factor and rightly so

Cycling and the credit risk of “lockdown” businesses

As some of you will know, im a pretty avid cycler and have been for over 15 years, well before the current “mamil” craze and of course the boom in cycling through lockdown.

This lockdown boom is over, as illustrated in this piece in the Observer. A word of warning though. the article blames “Brexit” and government policy. Im far from an apologist for either but when you read the piece, desperate attempts to blame both simply are almost comical. Simple fact is that most people need to only buy a bike once every few years and the same near enough applies to accessories and clothing (which tends to last well) too. And an awful lot of lockdown bikes have been sitting in the garage for months on end

Wiggle is my preferred supplier for cycling equipment and clothing. Terrific customer service, range and pricing. Last week they went into administration which was a shock until I looked at their accounts. Sadly the financials were pretty shocking and it was telling that they were also making significant loses during the lockdown cycling boom. They are still trading under administration and with a strong brand, there is no shortage of interest but overall the market is grim with Sigma sports, a slightly more high end retailer, also collapsing

What’s the lesson to be learnt here? To my mind it is that businesses that clearly profited (although Wiggle even failed to do that) during lockdown because of their market, should be looked at very carefully in more normal times. A client of mine that manufactured high end kitchenware had also had a serious turnabout in fortunes and ceased trading a week ago.

Why Trump is a lesson for business owners….

The current case against Donald Trumps empire in New York will of course be cited as purely politically motivated by his increasingly strange supporters but the fact remains that grossly inflating the actual value of assets to obtain finance is fraud, pure and simple.

It does also bring into question who was conducting and signing off these “valuations” as well as perhaps also those who accepted them at face value from a client who, lets put this nicely, had a reputation, but that isn’t the interesting issue here

What is almost comical in this case is the defence by Donald Trump Jnr. In fact it’s so poor that if that is all they have, then surely this case Is heading in one direction

Admittedly I don’t know the full extent of all the elements defence but it appears that a large proportion of the blame is laid upon “the accountants”

Quite why the “accountants” would inflate asset values without direction is hard to fathom. Furthermore its simply no defence to claim that the financial statements that you have signed off are not your responsibility because you don’t “understand” them, which is his claim

This brings me back to my thoughts. I have heard too often from potential business owners and some actual business owners that “they are not accountants” and “finances have nothing to do with me” and frankly it doesn’t wash

To run any business you have to understand the numbers. Isn’t that obvious?

And ignorance is no defence in any circumstances

Punishing failed bankers in Catalonia

I came across this rather interesting piece of history in Edward Chancellors excellent history of Interest Back in medieval times, failed bankers in Catalonia were beheaded right in front of the bank premises. Apparently there is at least one recorded account and it would certainly have brought an element of drama to underwriting

I suppose it would also have livened up the high street Saturday shop. Many might say that perhaps it should still do so and it was a pity that the act of punishment was repealed, especially before the period of breathtaking arrogance and incompetence during 2008

Its a viewpoint and of course, I couldn’t possibly comment

Insolvencies rising fast but is it a blip?

Business failures at the highest rate since 2009 is not exactly cheerful news but the question is whether its a pattern going forward or a temporary blip in the statistics?

The insolvency bodies and firms who produce these statistics often back them up with their assessment of how many businesses are effectively insolvent or barely surviving anyway but then again it could be rather seen as akin to Funeral Directors gleefully warning about an outbreak of the Black Death or Ebola

That maybe unfair and i’ve had the pleasure of meeting both the past and current very personable heads of R3 (the insolvency body) and wouldn’t doubt their professionalism

Yesterday I was informed that one of my debtor finance clients had ceased trading. A high end kitchen ware manufacturer with quite a long history and very good products (I know because i’ve bought them) I cannot disclose the identity because its not in the public domain but its always sad to see this type of business fail. The last filed accounts demonstrated a deteriorating balance sheet. Kitchenware was all the rage during lockdowns and and perhaps a slump in turnover was predictable as well the impact of energy costs

My sense that this was a spike in insolvency numbers but the numbers will remain quite high for some time to come.

Lets see