Category Archives: Weekly digest

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Invoice Factoring Blog, 15th April 2016

Please follow the link at the bottom of the page to sign the Guide Dog petition
Please follow the link at the bottom of the page to sign the petition about Guide Dog access to businesses and public areas.

Whilst this week has not exactly been overrun with enquiries those that have appeared have been in sectors not traditionally associated or liked by the invoice finance market.

Not too many years ago businesses that sold to other businesses were restricted within invoice finance by providers ignoring certain sectors that were perceived to be of a higher risk. Construction was an obvious one and then individual financiers had an idiosyncratic approach that sometimes precluded sectors favoured by others. By way of an example, one bank would not consider, for invoice finance, any business within the watch market.

Now, both with an increase in the number of funders and a more commercial and innovative approach to risk, invoice factoring businesses will consider virtually all categories of business. Domestic or export makes no difference and the nature of the debt created will be explored fully to find a way to raise finance.

But, and its a big but, not all financiers are the same and whilst many will say they will do something the reality can be very different. This is exactly where an independent broker can assist. With 30 years industry experience and nearly 20 years broking we do know which invoice financiers deliver on promises and which ones dont


Away from work there has been more coverage this week of businesses turning away Guide Dog owners because their dog was not welcome. This is against the law and undermines a Guide Dog owners confidence in a profound way. If you have a minute to spare the Guide Dogs for the Blind would like as many people as possible to sign their petition,

Factoring Blog 18th March 2016

Factoring Partners, Weekly Blog, 18th March 2016


As the Midlands invoice finance community appeared to descend on Cheltenham, the week was notable for a budget where more seemed hidden in the detail rather than articulated in the Chancellors actual speech. What is getting clearer, is that politicians, of whatever ideological leaning, are in fact guided almost entirely by self interest and watching and listening to the majority of MP’s at Westminster is a depressing experience.

Specific to the world of invoice finance came the release of statistics up to 31st December 2015, these statistics come from the Asset Based Finance Association (ABFA) whose members are responsible for the vast majority of all Factoring (in the broadest sense) deals done.

There’s a lot of numbers to wade through but what is interesting and has been alluded to in previous blogs is that client numbers, in the vital £0 to £5m turnover range, are going backwards. As at 31.12.15 there were 35,326 businesses (with annual turnover in the £0 to £5m range) using ABFA member services. At 31.12.14 this figure was 35,470.

Given recent observations about client satisfaction levels, both from my own calls and reading survey results from assorted invoice financiers these figures are not only disappointing but surprising too. Reading some of the posts on LinkedIn suggests there are those who are bucking the trend and writing loads of new business but then again some LinkedIn posts may be a little ambiguous, i.e not true!

Least surprising news item of the week was The Bank of England’s Monetary Policy Committee’s decision to hold Base Rate at 0.5%

Enough of work related stuff, there’s a Grand Slam to win

The week completed, 23rd October 2015

Disappointing news from Tata Steel cutting around 1,200 jobs as a reaction to the competitive pressures from China & their ‘dumping’ of steel across the globe. Coincidentally the week sees an announcement from our Business Secretary, Sajid David, that the visit from the Chinese President would bring over £20bn of new business deals that would help’ support jobs throughout the country’. Not sure how much consolation this would be to those about to lose a job.

With the steady decline of steel comes a significant impact on support businesses and industries and one estimate suggests that every job within the steel sector supports five outside. The knock on effect is potentially damaging to many small businesses either directly or indirectly connected to the steel industry.

This type of industry, structural, change has happened before and the working world will undoubtedly adapt but in the short term businesses suffer either through loss of turnover or losses a consequence of customer insolvency.

The merits of credit insurance become evident where this type of industry upheaval leads to insolvencies. Businesses that insure their customers are protected, assuming they have operated within policy guidelines, thus minimising the impact. There is off course a loss of future turnover but the immediate impact is mitigated.

Credit Insurance can cost anything between 0.2% and 1% of turnover, and there will be exceptions at either end of this range. Not all businesses insure their customers, quite the opposite, which is odd in many ways. Businesses insure against all manner of liabilities but more often than not fail to insure arguably their most significant asset i.e their customers.

insurance against customer insolvency can be incorporated within an invoice finance facility or bought as a stand alone product, feel free to email with any queries


And finally six weeks ago today Darcy, a Guide Dog brood bitch gave birth to 8 puppies, today they head off to Guide Dog HQ to be innoculated and chipped before going off to spend a year being puppy walked after which full time training begins to turn them into Guide Dogs.

Guide Dog puppies




The week completed 16th October 2015



Trade Finance
Trade Finance

We have recently concluded a couple of trade finance facilities, enabling UK based businesses to buy goods from overseas and sell here.

In the first example the UK business sourced make-up from a supplier in the far east. From some samples it achieved firm orders from a number of UK based retailers, with an aggregate sale value in the region of £225,000. The purchase price from the far eastern supplier was the sterling equivalent of just over £120,000.

The initial problem was that the far eastern supplier would not offer any credit to the UK business and they had insufficient company or personal resources to finance themselves.

Our involvement put the UK business in touch with a specialist trade financier. They had all sorts of concerns and covered every eventuality but without their involvement there would have been no transaction.

The trade financier paid for the goods and with other costs put out just over £130,000. With cleared funds in their bank the far eastern supplier released the product which then spent 24 days in transit to the UK.

On arrival in the UK the product was split, re-packaged and delivered to the buying retailers in accordance with their orders.

Trade Finance, as the example above shows, is a product that can facilitate a transaction that may not otherwise happen. But it is absolutely crucial to examine the costs.

In the example the financier has advanced £130,000 and their charge was 2.86% per month. By the time the goods arrived in the UK, had been dealt with logistically here and then paid for nearly 4 months had elapsed so charges came to just under £15,000

Add in other charges, insurances, freight, duty and its easy to see how the selling price of £225,000 is eroded. With this example £225,000 is reduced to £80,000 prior to other charges.

Consequently, with trade finance the crucial aspect which will determine any involvement from a financier is the margin. Commodoties tend to have very small margins so trade finance rarely works but where a product is sourced and a buyer is found with a significant margin then trade finance is invaluable.

We have considerable experience in trade finance and contacts capable of funding the trickiest of transactions so if you have an opportunity, feel free to get in touch.


As usual, at least over the last few weeks, the blog finishes with our Guide Dogs in waiting, the puppies are 5 weeks old and we are advised by Guide Dogs to subject them to different noises, latterly they have been listening to Test Match Special commentary from the Middle East and one of the most boring test matches in history. Consequently they have been sleeping more than usual.

Sleeping puppies
Sleeping puppies
















The week completed, 2nd October 2015

One of those weeks where very little happened in the world of Factoring Partners through a combination of losing a couple of days to ill health, a pretty flat invoice finance market and some new arrivals.

A decent proportion of what was left of the week (after taking into account the ill health and the contents of the photo below!)  was spent with two, unrelated, businesses. Coincidentally both are UK registered companies but effectively ran from overseas, in one case mainland Europe and the other the Far East.

Both seek specific finance and I suspect one will go through to completion whilst the other has access to virtually free funding through a local related business so will progress no further.

Although largely managed from outside the UK funding remains possible reflecting the commercial manner in which the lenders are viewing the propositions. In both cases the work undertaken for customers creates a strong debt, in the UK, and its from this that lenders derive comfort. The fact that the Directors are mainly based overseas is manageable.


Avid readers of this blog will remember the sad news of our previous Guide Dog Brood Bitch posted on 26th March of this year. Our second, Darcy, gave birth to her first litter consisting of 8 puppies so the limited activity caused by the flat invoice finance world is more than made up by the new arrivals.

The Guide Dogs charity is a fantastic cause and the work these puppies will ultimately undertake is extraordinary. For the time being, and there’s another 3 weeks before they head off to start their puppy walking year, they act as a magnet to visitors and a distraction to the world of Factoring.



The week completed, 29th May 2015

This week has seen the conclusion of a deal involving a food business which made an initial enquiry some months ago.  The business has annual turnover just under £0.5m and as at this week was owed by its customers £95k.

The business sells to a mix of customers and puts terms of ’30 Days’ on its invoices. If, and its a big if, customers all paid to terms the sales ledger balance wouldnt be £95k but would be nearer £40k. Its a reflection on the payment culture we have that this isnt the case and the actual balance of £95k points to an average collection period of over 70 days.

Until this week the business operated with the help of a bank overdraft with a set limit of £35,000. With the implementation of an invoice finance facility the bank has reduced the overdraft facility to £5,000 (representing the fact it has lost its major security).

The invoice financier released £62,000 and added to the bank facility the business now has accessed over £25k of additional working capital.

The additional funds will ease some critical supplier relationships and allow for business growth. The invoice financier will take over the collection job and over time it’s hoped the average 70 day collection period will be reduced. In this case there are clear benefits and the costs are offset in a quantifiable way. There are unquantifiable advantages and benefits too not the least of which will be that supplier relationships are to be repaired and built upon.

Next week the invoice finance world holds its annual conference in Birmingham, a bit of a departure from previous venues like Barcelona, Venice and Prague, but handy for me!

The highlight of the week undoubtedly was a trip on the Thames Rib Experience, a unique way of enjoying the remarkable sights of London from the Thames.

Thames Rib
London from the Thames Rib Experience

The week completed, 3rd April 2015

The first quarter of 2015 has come to an end and it seems to have gone by in the blink of an eye. Business has been written, not perhaps as much as would have been liked but possibly more than was expected. The quarter finishes with good enquiry levels.


As it is Spring the invoice finance world is patting itself on the back through a variety of awards and surveys. Always self-indulgent I’m not sure they truly reflect performance rather than representing a visible expression of vested interests. All invoice financiers have merit, and they all, on occasion, get things wrong; its finding the right one for the right business that is all important.

The political landscape and consequently, to a certain extent, the economic one too will be dominated over forthcoming weeks by the election. We will witness the unedifying spectacle of politicians grovelling for votes by saying anything that crosses their mind  they feel may appeal to the electorate.

I have an extremely low opinion of most politicians as it seems they are driven by self-interest and have a distant, at best, understanding of commercial pressures. Our economic success, or failings, are largely in spite of, as opposed to because of, political input.

Will be difficult to avoid the election but it will probably be worth trying and if 7m watched last nights leaders debate it demonstrates some very constructive counting.

The week completed, 6th March 2015

A week dominated workwise by lengthy discussions with an overseas business looking to sell product into Europe,  not including the UK, and seeking funding and administrative support. A challenging case but subject to certain conditions one that should end successfully.

Less successful, depending which way its viewed, centred around a client and a new, potentially lucrative, order. In short, the client was approached by a potential new customer, a newish business with limited information available. Unfortunately a bit of detective work revealed a number of bust businesses in the background with creditors left with next to nothing.

The episode shows the merit in research which in this case sadly diluted the initial excitement in winning a new customer. It may still work but will involve a pricing change and a significant amendment to terms to include a large deposit.

The week ends with a visit to the capital and a dinner at The House of Lords, hopefully I will remember which way to hold a knife and fork.



The week completed, 16th January 2015

Two full days in Birmingham this week talking to both business financiers and professional support practices. The financiers are busy, so they say, but the major challenge appears to be getting prospective clients, borrowers, to actually draw funds.

Dealing with a couple of prospects at the moment considering single invoice finance, also known as spot factoring. This type of facility offers real benefit to a business given its flexibility and the ability a borrower has in using the facility on an as and when basis. The costs are high though and must be calculated and considered prior to entering any agreement.

There’s talk of new invoice financiers entering the UK market; competition is welcome and businesses get greater choice. Whether the market is sufficient to accommodate newcomers is another issue. Whether new entrants are forthcoming or not there is still greater choice for businesses in terms of funding alternatives. Consequently its vital any business takes advice.

No advice is better than bad advice or biased advice so its important businesses talk to independent, experienced advisers. The invoice finance market is full of well meaning brokers but all too often their opinion and advice is compromised either by a lack of independence or lack of experience – or both.

Interesting to see and listen to Digby Jones (as pictured below)JMS & Lord Digby Jones

on Television this morning (16th Jan) talking about small business and funding. He championed invoice finance without actually using the word Factoring! He is immensely proactive in his support of SME’s and their contribution to the UK economy and has an interesting take on the banks and their support and/or lack of it.

The week completed, 9th January 2015

A surprisingly busy week for the first week back after the Christmas & New Year break, whether this sets the tone for the year on not only time will tell.

A couple of interesting construction finance needs and a sizeable commercial property requirement added to by a business with a predominant export sales ledger. Further progress with a peer to peer requirement adds to a varied week demonstrating the capacity to offer far more than simply invoice finance. It also indicates the variation in finance available.

Of the enquiries currently being considered a High St bank is only involved with one.

Concerning news of an invoice financier taking a materially significant fee when a client banked a customer payment incorrectly. At a time when lending practices are being closely scrutinised, both commercial & personal, the scale of charge, in this instant, seems inappropriate.

The Bank of England has kept Base Rate at 0.5% and if this remains the rate in March it will have been at this level for 6 years. It would be interesting to hear if those who set the rate back in March 2009 would have anticipated it being at the same level 6 years on.

In looking at matters financial the excitement knew no limits on discovering that 1p, 2p, 5p, 10p, 20p and 50p coins make up a regal coat of arms!!

coat of arms coins