Factoring Partners blog, 27th May 2016
An interesting week to compare two businesses with whom we are speaking with both discussing existing & potential finance.
Both are distribution businesses but in completely different sectors.
The first has an existing invoice finance facility and pays less than 2% above Base Rate (0.5%) for the finance and a commission charge equating to around £1000 per quarter. The business is well run, historically profitable with, in invoice finance terms, a strong, clean customer base. Access to finance is not an issue with assorted invoice financiers falling over themselves to offer facilities, a fact reflected in the rates enjoyed.
The second has an existing invoice finance facility and is managed by a serial and self-styled ‘entrepreneur’ with a catalogue of failed businesses in the background. Interestingly, this business is making a lot of noise about lack of access to finance and ‘relationship issues’ with the existing invoice financier.
A quick look at publicly available information reveals the background and the deductive powers of Sherlock Holmes are not needed to establish a pattern. The business is a viable one in that the products distributed do sell but the manner in which the current and previous businesses have been managed is where the issues arise
Not surprisingly at the same pace financiers are rushing to support the first business mentioned they are rushing to get away from the second. What is demonstrated here is that the character of the people behind the business is as vital and probably more so than any operational issue.
The Factoring Partners adword experiment continues. Since the 1st May the Factoring Partners advert has appeared on 3929 times when specific words have been searched. On 16 occasions searchers have clicked on my advertisement to land on the website. A number of enquiries have resulted (and those familiar with the world of corporate finance will be aware of their use of that expression and the inclusion of zero as a number!)