Features                      

Doug Crawford

For us, the year so far has been against the challenging backdrop of both a sale process and the difficulties our parent company, Cattles plc, have found themselves in. Throughout the year, and despite these challenges, it has been heartening to witness the fantastic loyalty our clients, introducers and staff have shown. For me it demonstrates the strength of relationship with our clients and introducers and the extraordinary resilience of our staff who have taken the process in their stride, adopted a business-as-usual outlook and continued to deliver the highest possible client service.

Now we have secured Cattles plc shareholder approval for the sale, we look forward to an exciting future with our new parent, Anacap Financial Partners who bring consistency, clarity and certainty to the ownership of our business. The backing of a parent who is prepared to invest in our future gives us an extremely well capitalised business and that, together with significant headroom in our working capital position can only mean a positive and bright future as we head into the market confident, and with a fierce appetite to do deals.

Jonathan Cranston

Ashley experienced good growth in the first half of the year, client numbers increasing from 245 at the start of the year to 277 as at 30 June 2009.

It is clear that tight credit conditions have created a great opportunity for the smaller independent factor, though the recession has resulted in an increased attrition rate in the last
few months.

Nick Sellars

The first six months of 2009 have been very challenging and, across the board our customers have faced unprecedented pressure. There are a few exceptions, but most businesses seem to have seen a fall in turnover of around 25%. Some sectors have been hit harder. Those that have not had a flexible cost structure have tended to go by the wayside, particularly at the smaller end. Those companies that have managed to adapt to the drop in business, should come out stronger with less competition and the ability to grow once again.

Our consistent approach to risk has meant that losses through bad debts have been minimal, although I must congratulate our operations team, who have kept on top of debtor books whilst businesses have been failing. We have always championed an active collection process and telephone chasing of all debtors. Our average outstanding debtor days, across our whole book has therefore hardly changed from the previous year, and that is testament to our collections team and is testament to the fact that, if you don’t get on the telephone, you’re not going to collect your money! I am sure more of our customers would have suffered more, had we not had this practice. Throughout the UK, I think that there would have been many more insolvencies had HMRC not taken such a soft line on outstanding PAYE and VAT. Whilst some of our customers have taken advantage of this relaxation, almost as a cheap form of borrowing, and certainly as a buffer against the effects of reducing turnover, we have been careful to warn them that this stance will no doubt change very soon and we are not keen to support HMRC arrears to too much of an extent.

We have been careful to support companies during this period, and have avoided knee-jerk reactions in cutting limits, to the same extent that credit insurers have cut limits. Provided that we have had a balanced ledger, we have been able to manage this situation quite successfully and make prudent over-payments when necessary. Fortunately, our own credit insurance facility has been more than sufficient in the circumstances and as a result, the strength of our credit insurance has enabled us to pick up a lot of business, together with an increase in business for our credit control products.

Inevitably, when the turnover of your portfolio reduces by 25%, then service charge income is going to reduce by a similar amount. That, together with the reduction in VAT, a fall in interest rates which makes our capital less efficient, and increases in our cost of funds, meant that there was a significant hole that needed to be filled from an income point of view, or conversely a reduction in costs. As we are happy with our risk profile, we made the decision to invest in marketing and fill the hole with new business. I am delighted to say that the take-up in new business is now better than it has been throughout the 22 year history of the company, though I am loathe to reveal the secret to the world at this point.

As we start to crawl out of recession, I see a stronger customer base and excellent potential for new business in the future. With now realistic returns that certainly needed to be addressed, (sometimes a recession is the way of addressing pricing which was far too low previously), I believe that we have come out of this in a much stronger, healthier position and that the lessons learned by all of our staff, will stand us in good stead for the future.

John Bevan

A year ago I mentioned various new structures and an air of caution concerning the market. Although we’ve experienced unprecedented times, we’ve had a strong year and made a solid contribution to the wider group. Barclays remains well capitalised and combined with our approach to lending, I believe we continue to be in an enviable position to be able to service the needs of existing customers and to grow at pace in our chosen markets. However, with liquidity at a premium there have undoubtedly been pricing changes and this is reflected within the wider ABFA market with demand for cash and commitment growing. In the current climate, there are still some good opportunities to be found and we need to carefully search these out, looking outside the normal spheres for new business in areas that may not have traditionally been on our radar. Additionally there are industry sectors that may now provide attractive opportunities for us.

Undoubtedly the number one challenge at the moment is the effect that the external economic climate is having on our customers. Our customers will need our continued focus and support during this period and we need to stay close to them in the coming months, listening to them, identifying their needs and offering the best possible advice and customer service.

Our control framework has been tightened over the last year and we have made great progress in mitigating risk. We have recently undertaken an end-to-end review of our processes and with the assistance of key IT enhancements, ensured that impairment in Sales Finance has not increased year-on-year, a great result in challenging times.

Support of Barclays colleagues to our product set has been key to our growth across all sectors and is seen as critical to continued safe lending. By offering a joined up approach with our Commercial Bank and other Barclays colleagues we are maximising the opportunities and putting ourselves in the best possible position. We have also achieved one risk view of the customer in Commercial Bank, giving us a new level of transparency, and support to our customer base.

Close working together between the banks on larger opportunities has been key over the last few months and is fundamental to the growth at the larger end of the syndicated market and I can only see this area growing quickly during the recession as banks look to spread their risk. As the economic environment begins to improve there will be obvious opportunities in the leveraged and turnaround market as well, one we are well positioned to take advantage of. Additionally I expect to see an increase in larger transactions.

ABL type deals are definitely on the increase in the UK, although still a young market we have seen some good deals to date. Our ability to lend against other assets is an important part of our support to existing customers. For many companies, the outlook is about survival with growth far from their minds and this is stimulating quite a lot of activity in the re-financing market. It also appears that even where existing facilities are sufficient, more companies are entering into renewal discussions at a much earlier stage than previously seen and looking for greater commitment from their chosen financier over longer terms.

Market capitalisations have dropped and with lower prices and reduced competition, opportunity is there for companies to gain market share when previously they may not have had the resources to fund this. For the right price and with the right level of integration, acquisitive companies can become even stronger, being well positioned for future growth. In an environment of deals being put together on lower debt multiples, we believe that ABL will be an increasingly popular solution when deal activity levels pick up.

David Robertson

There is no denying that over the past 18 months the global economic and financial crisis has had an unprecedented effect on the invoice finance industry and presented many challenges for us all. However with increasing talk of green shoots in the UK and positive economic indicators, along with two of Europe’s largest economies – France and Germany – officially coming out of recession, it is fair to say we may just be over the worst and a step closer to recovery. Although, as with many in the industry, we will approach the next couple of months with an air of caution.

It is against this backdrop of improved confidence that I present our half yearly review which brings positive results from around our group. Bibby Financial Services ended 2008 on a high after recording record pre tax profits of £20.5m – a very healthy 24% up on 2007. And despite a slower than usual start in Q1, something virtually unheard of for Bibby Financial Services, I am delighted to report that our team has risen to the challenge and have put in a strong Q2 performance with new business leads up 25% year-on-year and record levels of new business being recorded in June and July. We are confident that this is only the start of things to come.

Our diverse product portfolio has certainly aided this achievement. Bespoke finance packages for businesses operating in construction, recruitment and overseas have continued to reap rewards, growing by 20% year-on-year and contributing 20% to our new business deals, proving there is demand for product innovation within our industry. The next stage in our product development strategy will see an increased focus on the generation of larger deals (e.g. up to £5m funds out), whilst maintaining clear support for smaller businesses. We will build on our success through efficiency and agility to ensure we meet and exceed
client needs.

As always we remain committed to delivering a high quality service to best match our client’s and intermediary’s needs.

Through our overseas business, we are also experiencing strong growth. In Europe our client base has grown by 10%, an enviable position to be in considering the challenging environment that many of our European companies have been operating in. Our Asia Pacific region has suffered no ill effect from the downturn and is making great ground in its own marketplace. In fact advances are 35% up on last year. In America advances are on a par with 2008, which is impressive considering that the American market bore the brunt of the financial crisis.

In preparation for the future, we have spent the past 12 months investing in our business to improve our internal processes to bring greater efficiencies and remove frustrations. By streamlining our procedures and administrative tasks, our regional credit control teams are freed from red-tape to spend more time chasing and collecting debts – vital in today’s challenging market where late payment is prevalent.

As we enter the final quarter I remain both realistic about the tough trading conditions that we find ourselves in, but also confident that the current levels of activity can be maintained both in the UK and overseas as our appetite to do business and our ability to write it remains unchanged.

We have a solid foundation in place on which to continue our ambitious plans. We are prepared for the challenges and opportunities that the remainder of 2009 will bring and I am looking to the future with great excitement about what can still be achieved, getting back on track!

Mark Byrne

This time last year I commented that we had not seen any adverse affects of the credit crisis on our debtor book and that we were insisting on debtor insurance.

Well things have certainly changed since then: we have seen our client book reduce in sales volumes by circa 15% and we have lost more clients than any time in our history. This is a relatively new experience for us and we have tightened systems and strengthened our operations team to manage these changes.

New business has compensated in part for these lost clients but we seem to be working twice as hard to get the same result. Enquiries have rocketed, but most of our new enquiries
are from businesses that are already factoring or from businesses that are in trouble rather than from businesses looking for working capital to fund growth.

I believe that there will be some real opportunities for the industry as a whole in the future as we come out of recession and businesses start looking for finance to fund sales growth. But don’t think that this will be for some considerable time yet.

In the meantime it’s a case of managing the book tightly and trying to put on quality clients to replace those lost.

John Onslow

I think it fair to say that the last 12 months have been an unusual period for all concerned. For Centric specifically, we have been busy building our book but we have also taken advantage of the fact that, for a variety of reasons, some excellent people have come on to the market. The fact that we have actually had a marketing budget has helped us build the Centric brand much more quickly than we could ever have envisaged. Put another way, the current macro economic climate has allowed Centric, as one of the newer independents, to punch above our weight.

In the marketplace we have seen the following trends:

Trying to predict the future in the current climate is for the very brave or plain stupid. At Centric we try to avoid both extremes but I suspect that the next year will continue to prove difficult for the general UK economy.

Speaking purely for Centric – with the support of our equity providers and substantial debt facilities available – we will continue to build our book albeit on a relatively conservative basis. Strategically, we have made the decision to concentrate on asset-based lending with invoice discounting at the core but if the right factoring acquisition opportunity came along you never know.

Sandra Robertson

An interesting and challenging year that has gone by very quickly with changes in the economic climate and our industry. The number of new business enquiries has remained steady and predominantly from the recruitment sector now which is where our focus has been for the past year through working in partnership with our sister company Paydynamics.

David Thomson

As SMEs struggle to cope with spiralling levels of bad debt, customer failure and poor credit terms there is an inevitable knock-on effect on the quality and quantity of business coming through the industry’s doors. Bad debt is increasingly problematic for providers as a growing proportion of our client base experience financial difficulties. This deterioration in the loan book has forced the industry to make heavy and expensive investment in IT security so we can make an accurate assessment of risk and respond quickly when issues arise.

While invoice finance rates remain extremely competitive, we operate in a low interest environment. Should base rates remain low relative to libor, providers may ultimately be forced to review the deals offered to clients if they are to remain profitable. Already operating profits are extremely tight and these inclement conditions have already claimed some prominent industry scalps as smaller independents struggle to compete. I anticipate a period of industry consolidation for some time
to come, with those players who succeed in avoiding the fallout concentrating on nurturing books of quality business rather than going solely for volume business.

On a positive note, freezing of bank credit markets has made invoice finance a more attractive option for many SMEs who may now review their financing needs to keep their business on track during the downturn. We are, for example, experiencing unprecedented levels of enquiries from larger businesses, many of whom are looking outside traditional funding routes for the first time – good news for the long-term financial health of the sector.

Like the majority of providers, Close has experienced its fair share of challenges in recent months. However, client satisfaction levels are exceptional and we remain in a highly profitable position with our first-to-market online invoice discounting technology, IDeal, attracting high migration rates from competitor products. Such an innovative service offering makes us well placed to profit from an industry wide move to a more value orientated model.

We have also benefited enormously from our position within the Close Banking Group. Our parent company is trading well despite the economic environment and has had no exposure to the toxic assets which have been so detrimental to UK banks’ performance. This pedigree as part of the Close Group has given us the strength to attract new senior hires and make strategic acquisitions – such as the recent purchase of Ulster Factors, the Province’s longest established factoring provider – at a time when cuts to the cost base have been commonplace.

As regards the future, we are extremely bullish about our performance prospects having emerged from the past few difficult months in profit and with our strong product offering intact. We aim to consolidate our position going forward, building on the loyalty of our customers and strength of service while focusing our sales team on cultivating high calibre leads.

Martin Rothera

Clydesdale and Yorkshire Bank has always maintained a traditional approach to its lending, and because of that our door is still very much open for quality business. At the beginning of the year we posted strong interim underlying results and we have recently announced an additional £1bn in new lending across the UK.

We have continued to show good resilience in the current market through our sensible decision making and our avoidance of taking on unnecessary risk. Our prudent approach, both in the past and for the future, means that we have solid foundations on which to operate. We are focused on assisting our existing customers through unprecedented market conditions and to supporting selected new companies with their trading plans.

The bank’s focus is still on attracting trading businesses so it is essential that we have a strong invoice finance operation to meet these strategic aims. We have recently invested in our invoice finance team by bringing in new people, strengthening our risk framework and delivering an enhanced invoice finance direct internet proposition.

Since my appointment as head of invoice finance in March we have developed and improved the services we offer. We have put into place a new regional structure giving each of our 72 financial solutions centres across the UK an invoice finance presence and all the necessary support facilities. We have recently appointed a senior partner in risk as well as eight senior partners across sales and client management who will be leading the teams in each region.

We are finding that clients are facing difficulties in areas such as stretching in cashflow, reduction in sales levels and increased client failures. As a bank we are in a good position to help our members in resolving these issues and we are able to go that extra mile to aid and support them.

At the end of June we provided a national £100m invoice finance fund to help the SME community. This finance has allowed the bank to continue to support successful businesses, helping them to secure their trading future and to give them a competitive edge. In the two months since it was launched, 20% of this fund has already been allocated and we will continue, when able, to support our members with their invoice finance needs.

We have firmly established invoice finance into our business banking network and this has put us in a strong position to continue to offer our members, both current and future, the support they need for the remainder of 2009 and for the years to come.

Mark Chamings

The first six months of 2009 have been a period of re-assessment and re-focusing for Coface. Our insurance business both locally and globally has seen notifications and claims running at record levels and only now are we starting to see the early signs of improvement. Our receivables finance business has been focusing on our existing insurance policy holders for new sales and seeking to maximise the strengths and synergies that naturally come from cross-selling. The current banking and liquidity crisis has now opened up new opportunities with large businesses showing interest in asset-backed finance and Coface’s global network of factoring platforms – 28 countries now open – is also generating a regular stream of UK opportunities from international groups.

Jeff Longhurst

It was a funny old start to the year. New business was ahead of target, but existing clients drew down a lot less money than expected.

In previous recessions the industry hasn’t seen this drop in funds in use and so it has come as a bit of a surprise to us all. Was it because this recession has seen sales drop more than in any other? Was it because clients’ customers used up existing stock before buying more? Was it because the government has encouraged businesses
to borrow for free from them by not paying statutory creditors?

Well, the answer is yes to all these questions and it is only recently that we have seen the trend reversed and our funds advanced to clients reach higher levels than at the end of last year.

Indeed we believe that having an increase in funds out compared to year end is in itself quite an achievement. And our investment in changing the focus of Crédit Agricole into dealing with bigger and better clients is now paying dividends as we see more money out to more new clients.

We’ve had to restructure a little to deal with this; centralising the back office in Docklands whilst sales, client management and audit work out of Docklands, Reading and Leeds. And we’ve recruited three experienced ABL new business people in London, Leeds and Manchester to help us get even more new business on board.

The result is that our new business pipeline continues to look better than ever and with such a strong and liquid parent as Crédit Agricole we are very optimistic for a very strong end to 2009 and for the years to come.

David Coates

The first half of 2009 saw Davenham Trade Finance benefit from the refinancing of the group position.

Obviously delighted by this, the trade division has written and continues to write new business and perform in line with expectations.

We are looking for quality of client, MI and commercial business experience; this must be judged against a quality criteria check that the current economic environment demands.

The second half of 2009 has seen this trend continue with new business being written on a selective basis in view of a backdrop of a difficult trading climate for UK.

Looking forward we remain vigilant against fraud, forward looking in new business and supportive of our client portfolio.

Competition in the marketplace is finely balanced between availability of liquidity and price; we do not see this changing over the next six to 12 months. This allows Davenham to utilise our entrepreneurial knowledge and structure profitable deals with well balanced risk.

We are under no illusions that the market is changing weekly and all factors and discounters will be under increased pressure to manage risk, make profit and grow their book in the face of continued capital constraints.

Here’s to another successful but challenging 12 months.

Graham Ethelston

The first six months of the year saw business hold up surprisingly well, perhaps confirming the view that our industry can be recession-proof.

Turnover was 12% higher than the equivalent period in 2008 and client numbers continued to grow at a reasonable pace. The level of new business enquiries has definitely increased although it must be said that so has the number of non-starters. Signs of the deterioration in the business climate are there however, average debtor days lengthened by four compared to last year and this despite increased credit control effort, and we have seen a higher rate of debtor failures, although thankfully not so far in clients.

During the period we continued to strengthen our team and can now muster a whole dozen, and we have also improved and formalised
some internal controls whilst maintaining the flexibility and speed of response which we pride ourselves on.

We enter the second half of the year in confident but cautious mood and early results support that optimism.

Tim Corbett

The first half of 2009 has been as difficult as any I have seen in my 28 years in the industry. Many clients have seen turnover decline dramatically driven by a number of factors, which have been raised widely in the media. All of the team at FCF have been working harder to maintain our support to clients, despite the fact that many of them have seen the credit insurers remove limits on buyers on a wholesale basis. We have seen a small number of insolvencies but fortunately because of our monitoring and risk management policies we have fully recovered our positions. As a business FCF has for the last six years been consistent in its approach to credit and risk and a couple of years ago we questioned whether or not we were in danger of the market leaving us behind. We now find that the pendulum has swung back in our favour.

Nevertheless we continued with our approach to new and existing business which was to firstly make sure that we understood the client and the risk we were being asked to take and that secondly we were properly rewarded for it. It has helped that we have moved the portfolio out of the churn area of the market and have attempted to leverage our pan-European offering. This has meant that in the main although clients have suffered because of the downturn, they are still in business. More importantly they recognise the support that we have provided through this period and are well placed with our support to take advantage of the upturn when it comes.

Over the last few weeks we have seen some positive signs in terms of credit limits, with insurers coming back on risk. We have also seen a number of large transactions where the company is at risk of breaching its banking covenants and who are now prepared to consider ABL as a real alternative to more traditional forms of finance.

John Jenkins

The significant uncertainties in the market have caused many firms to either put on hold or re-evaluate their funding plans, which in turn has led to a suppressed volume of new business opportunities in the ABL market. That said there were a few notable successes including Ardagh Glass, a £35m transaction.

As a business we have taken the opportunity resulting from the changes in the market to improve our overall proposition for customers by bringing together our financial platforms across the UK – Business Finance UK (asset-based lending), Capital Solutions (fleet, equipment finance and parts of CDF) and Healthcare Financial Services. As a result we are now a leaner, more focused organisation that can offer customers a broader suite of products and services from one source to support customers with their growth, restructuring and productivity challenges.

Whilst there is no doubt that the economic environment will remain tough for some time, we are encouraged by the increasing number of transactions that we are starting to see in the market. We still have to be mindful of the economic recovery and the bumpy road that it will take us along, but I believe GE is in a great position to build on its core strengths as it continues to grow whilst maintaining its focus in supporting its customers and business partners in the UK.

David Richards

Gener8 joined the sector in mid-2008 to provide predominantly, smaller ticket invoice discounting facilities to UK SMEs. Trading has been brisk with more than 50 clients signed up since start via a growing and experienced sales and operations team that includes Joe Waters, Jill Ingoldby and Ian Wedge.

It is early days still, but we are seeing a significant up shift in activity currently, thanks in part to some hard work but also due to several larger providers shutting their doors, it would appear, to the smaller business and given further recent consolidation. Margins are on a pleasing upward trend, no doubt in line with most providers and returning to a level last seen towards the end of the 1990s in our view. Long may this continue.

The G8 team prefers to focus on fairly traditional, translate to read simple, sectors when funding and will continue to do so as we build a brand we plan to be recognised as one of the leading service providers in the asset-based lending sector. Despite our early growth profile, which sees us ahead of budget, we still remain diligent and cautious in an interesting but exciting market.

Steve Smith

This has been a challenging period with increases in liquidations of over 25% and reductions in client turnover caused by the recession. However with our excellent parent support and name we are in a good position for the second half year and in the last quarter our book has grown by 10%. Bad debts are an issue for the whole industry with a lot of clients trying to hang on to their business and being tempted into pre booking etc however our good risk management skills have kept our figures well below the industry average. We are still providing a six month trial period as we are confident of our service levels and look forward to significant growth over the next three years.

Steve Box

There is no doubt that UK businesses have been having a hard time in recent months, and that the receivables industry has also faced challenges in this regard. The economic environment has been difficult, and, as a result, many invoice finance companies have seen client turnover and advances contract, and the risks increase. Sectors of the economy that have been historically highly factorable have been amongst those most seriously impacted by the recession.

The industry is also experiencing a significant decline in buyer credit limit appetite, and the trade credit insurance environment needs to improve if we are to retain confidence that existing and future clients will continue to trade on open account terms.

At HSBC too we have seen some falling off in overall client sales volumes, but having said that there remain some excellent opportunities for properly structured facilities, and we have seen some tremendous new business secured, particularly at the top end of the corporate sector, and in international business.

In the last half yearly review, I wrote about our new supply chain finance buyer scheme proposition. We are seeing great interest, with a number of new major deals signed and more in the pipeline. As liquidity becomes ever more important for businesses of all sizes, the reverse factoring approach is now all the more relevant and provides an innovative funding solution for corporate supply chains.

The finance landscape has clearly changed for UK companies, and there is no such thing as business as usual. Funding now comes not exclusively from the traditional overdraft but increasingly from well structured receivables and asset-based funding facilities. These types of facilities mean that the funding risks that accompany finance can be managed, and this is something that I believe we have done well.

Pro-active risk management is essential, and the close relationship that we have with our clients enables us to identify and address potential issues before they escalate. Focused risk training for our account managers has ensured they are well equipped to work with our clients on areas of concern.

Using a common sense approach and communicating well is also key to maintaining good customer relations in times of change – at HSBC we work hard to make sure our service remains of the highest quality, and I am delighted to see these efforts paying off, with our trademark customer satisfaction levels still remaining high.

Overall this has been a challenging six months, and I’m sure there will be some difficult times ahead, but as the saying goes may you live in interesting times – and I certainly would not have it any other way!

Tracy Ewen

In such a fast moving ever changing financial market, there is something to be said for stability.

Banks have come and gone, investors withdrawn, acquisitions made and the world continues to evolve towards a very different future for us all.

The one element that remains constant however throughout this is the British entrepreneurial spirit and the desire to run our own business. With traditional methods of finance being withdrawn or limited, there has never been a better opportunity for our industry to excel.

New business levels at IGF have risen dramatically since the commencement of our financial year on 1 April 2009. For the first time since joining IGF I can proudly say that we have a talented and focused new business team, who have managed to deliver a truly excellent performance.

Attrition levels, despite the increased number of insolvencies prevalent in this climate have been contained, achieving a small, net increase in client’s year to date.

Cash continues to be key and we are proud to announce that our collection days stand at 54 on our factoring book, some 10 days less than the industry average according to Q1 ABFA statistics. We pride ourselves on our service delivery from our highly trained team.

We are slowly seeing an increase in margins and more realistic pricing across all sectors bringing into balance the risk and reward profile. As an independent, we are benefiting from some of the negative press relating to the banking industry, though it is apparent there is room for both players, never has there been a time where combined bank funding and independent invoice financing has worked better.

The support of our parent company GLE remains strong and the joint initiatives we are undertaking with sectors of the group are adding to our penetration of the financial services market.

The funds provided by invoice finance companies are fundamental to the UK economy and to the path out of this recession. IGF is proud to support SMEs through these hard times and into the future.

I am sure the next six months will continue to be challenging, however, no one can ever say our industry is boring.

Paul Hird

As we all know 2008 of course saw the UK and the rest of the world enter into one of the worst recessions the world has seen. In the back drop of this Leumi ABL had a very good year posting a result which saw us being 167% of our budget. So far I am pleased to say that 2009 has been a good year despite the ongoing economic gloom, though as we all know out of recession come opportunities for the ABL/invoice finance market.

We have continued to grow the portfolio taking on clients who are attracted to Leumi ABL due to its flexible ABL offering, its very client orientated approach and it being part of Bank Leumi Group. We have completed a good number of transactions so far this year and will strive to build upon these successes as the Leumi ABL brand grows further. The team at Leumi ABL continues to grow as we recognise that to provide exceptional service you need an exceptional team.

As I write this review, the economic indicators are throwing out mixed messages about whether the economy is starting to edge its way, albeit slowly, out of recession. Overall the indicators seem to be showing that the worst may be over or at least that the decline in economy is slowing down; what is sure though is that as a lot of businesses are concerned there is still a long way to go so we will continue to see continued and possibly increasing levels of corporate insolvencies – as an industry vigilance has to remain the watch word.

David Totney

There is no doubt that 2009 is a challenging year, however, for a business of our size and target market, the opportunities of this current market can outweigh the disadvantages.

As a relatively small team, it has not been necessary for us to look to our cost base enabling a focus on the external market, communicating that we have the funds and appetite to continue writing good quality business run by capable management; I am pleased to report that even in these difficult times there are deals of this nature out there.

Given our historical approach, which has consistently been relationship, risk/reward driven client management, we have been pleased with the performance of our existing client portfolio. I am sure, particularly at the larger end of our book, that our clients have out-performed/manoeuvred their competitors ensuring our sales financed have held up well.

As ever it is a case of so far, so good and we would not wish to be at all complacent, but feel in pretty good shape to deal with the challenges of the coming 12 months.

Simon Featherstone

An encouragingly strong set of results for LTSBCF and BoS Cashflow Finance combined, in H1 2009…

Given the difficulties in the UK economy, and the fact that we were implementing the integration of our two businesses, we are very satisfied, and anticipate making further progress in H2.

Some of our key successes so far this year:

Looking forward, I expect the market to remain difficult and turbulent for at least the next 12 months, even as we emerge from the worst impacts of the recession.

As most of us are aware there will be more failures as we come out of recession, but this is balanced by opportunities, as clients look for increased funding to grow their way out of recession.

That said, I’m confident that we will continue our success in H2, based on our strong pipeline of potential deals, and by maintaining the right balance between risk and winning new business.

We will also complete our integration programme before the end of the year.

And I’m confident that our planned programme of new initiatives for clients and prospects will further enhance our reputation for service quality and innovation.

Overall, I’m delighted with the progress of our operations, and excited by the prospects for the rest of 2009 and beyond.

Toni Dare

Looking back it is hard to believe that we launched just a year ago, and what a challenging year in which to set up.

With a back to basics risk approach, focusing on our due diligence and underwriting decisions on the quality of the book debt, Platinum has managed to sweep up deals that others have been less comfortable with. Through this approach and with our flexible funding, we have preserved some good businesses, who might otherwise have failed through lack of funding.

I am delighted to report that, with this risk approach and a hands on attitude to client and sales ledger management, our business is growing beyond all budgets and expectations.

Client turnovers have suffered as expected in this current climate, but we have retained all deals taken on this year – with the exception of one small one which we chose to terminate. With no facility limits, those remaining clients look set to take advantage of any uplift in market conditions having bravely weathered the storms of the last year.

Our introducer base has been very supportive, and with a strong understanding of the deals we can turnaround – the coming year looks to be a good one. Thanks for your support!

With a healthy and profitable trading performance in this our first year, we have laid strong foundations for the year ahead and look forward to continued growth. Thanks to everyone who has supported Platinum. And for those
who are not sure what we do, we’d love to hear from you.

David Smith

As we start to move into the final quarter of our second year in business, it’s hard to believe what has happened to the economy in general and the banking sector in particular since PCF was established at the end of 2007. However, in many ways, the market conditions have created positive opportunities for us to structure deals that are based on service and experience rather simply costs. As a result we are delighted with the progress the business has made.

Feedback from our introducers suggests they like our personal style and we are confident that our cautious but commercial approach towards new business is creating a sound client base that we can build on in the years to come.

Martin Morrin

H1 2009 has been another challenging period for the UK economy. The availability of working capital is an ongoing issue faced by many businesses and therefore borrowing to increase liquidity remains to the fore. During difficult economic times, certainty in lines of finance and protection from bad debts are both key and this is where invoice finance, and increasingly ABL, have come to the fore as stable alternatives to ease cashflow fluctuations.

In these circumstances RBS IF is well positioned to work closely with our clients to develop and help grow their businesses. During H1 we strengthened our client facing regional operating model to support our commitment to our clients’ businesses and to enable us to deliver tailored funding packages to suit individual business requirements. The bank’s appetite to support good management teams and strong cashflows remains undiminished and we remain committed to helping our clients who are affected by the economy by introducing them to the benefits of IF as an alternative means of funding growth.

New business volumes in RBS IF have continued to perform well and the indications are that H2 will see a similar trend. At the same time we continue to develop and refine our risk management framework. In the marketplace credit is being re-priced at the moment, due to the increasing cost of funds in the capital market, but the old maxim of the right deal at the right price still exists.

The second half of the year will continue to be challenging but the strength of our invoice finance and ABL capability means we are well placed to deliver for our clients for the rest of 2009 and
into 2010.

John Farrell

We have had a satisfactory start to this year. Regency maintains our position in what is a very difficult and challenging marketplace.

The first six months has seen a steady flow of potential new business, however due to the current economic climate there have been a number of deals which we have decided to decline as they have failed our due diligence.

Regency continues to provide flexible finance facilities to the SME marketplace and anticipates steady growth across its group companies.

The continued expansion of our sales force should ensure that this growth is maintained and we confidently expect 2009 to be a very successful year for us.

Christine Tonge

The first half of 2009 has seen a slow start but despite challenging market conditions and competition business has remained steady.

More safeguards have to be put in place to avoid bad debt which we strive to keep to a minimum.

We have now been trading for over 40 years and retain a lot of our customers who are
happy with the professional and personal service we provide.

As the climate improves we are hoping to increase our business in the next six months.

Greg Bell

SBF have five different ways of calculating attrition levels and one of the methods we use puts SBF at the lowest in the industry – hurrah. Too high is not good, too low denotes an over zealous risk culture so a middle course is healthy as long as you get your money out.

I am delighted that 75% is the new 85% and that a degree of normality is returning to the sector but it is only a matter of time before somebody breaks ranks and makes a hero’s bolt for the finish line and its promised riches. I wish the CEO who is 20% below his budgets well.

Client failure, often fuelled by debtor failure, is a bigger threat without a cavalry of asset lenders ready to step into the breach and refinance assets bought back from the administrator at
a discount. Those who have blurred the lines
on what is traditionally factorable are now learning the lessons of what happens when the music stops.

The half year numbers are strong at SBF and are on track for a record year despite existing client turnover down by 15% versus the same period last year. A gradual recovery has been seen since but our income stream was underpinned by realistic minimum charges.

Our sales offices established in Leeds and Manchester will shift to become functioning regional centres by the end of the year with a greater footprint and full corporate branding and this is just the beginning of our quiet revolution.

I have served my apprenticeship over the past eight years on the SBF board and I thank those that have gone before me. Now it is my turn, along with a talented executive team, to take the keys, put the peddle to the metal and take this particular business out for a spin.

John Wilde

There is no doubt that the extraordinary and unprecedented economic events which heralded the turn into 2009 cast a blanket of uncertainty and anxiety across the whole of the UK business community, affecting major plc’s and small owner managed operators alike.

As a direct consequence, across our portfolio we have seen our clients’ combined turnover decline by around 10% over the first quarter, largely as a function of companies generally cutting back, running down stocks and adopting survival mode. This trend seems to have levelled out during Q2, with sales now tracking at levels similar to the previous year.

Whilst business failures have thankfully not reached the heights predicted by some of the gloomier pundits, many of those impacted have suffered as a direct result of losses incurred through debtor failure. The lack of available credit insurance has certainly exacerbated this trend.

There is little doubt that survival for many is in some part a function of significantly reduced interest burdens and a relatively benign approach from Her Majesty’s Revenue departments – clearly these cannot be considered as long-term solutions!

On the new business front, whilst opportunities are plentiful, enquiries up by 20% on the same period in 2008, reduced quality and increased risk have translated into lower conversions as we aspire to maintain our standards; finding the right clients and looking after them for as long as possible remain fundamental, as simple tenets within
our business.

Against this difficult backdrop, we have had to work even harder to maintain our momentum. The interesting thing is having a great team around you in tough times generates a sort of Dunkirk spirit which makes it fun to face all the challenges thrown up by the market!

As a result, our business is holding up extremely well and we remain firmly on course to achieve our annual objectives.

Adrian Taylor

In line with many of my colleagues in the industry, we have experienced an interesting and challenging year so far. During the first quarter of the year, the market conditions were turbulent and we witnessed considerable client distress as the economic downturn took hold and many businesses suffered financial hardships that constrained their operating positions and curtailed their growth aspirations.

However, on a more positive note, I am pleased to say that this situation is now settling down and in the last six months, despite considerable market uncertainty, we have continued to deliver returns in excess of our financial forecasts. This has in part been due to the close relationships we have with our client base, combined with our ability to deliver fast and effective solutions to relieve the financial pressures on our clients.

We remain proud of our track record of never having lost a client due to customer service inefficiencies and throughout this time we have reinforced our commitment to delivering service excellence by achieving industry leading ratios of staff to clients and debtors.

Our ability to offer packaged invoice finance in conjunction with asset finance and the European Finance Guarantee scheme has also helped underpin a solid six months trading. The new EFG scheme presents fresh challenges to asset-based lenders and we have concluded a number of initially modest transactions using the scheme, but we are currently seeking additional marketing opportunities that should support growth of the facility and enable further penetration of this product in the market.

My outlook for the future of the business remains confident, upbeat and positive. We continue to enjoy strong parental backing with a hunger to conclude good, sound business which has enabled us to engage in some factoring transactions that are at a larger value than we would normally have considered. We are anticipating broadly stable new business volumes during the remainder of the year, rather than the dynamic high growth levels that we have enjoyed in the past.

Yet, despite overall new business levels being lower than last year, I am reassured by the fact that this reflects our sensible attitude and balanced approach to lending risk that ensures we avoid incurring unnecessary bad debts and the resultant pressures that this would exert on our operations. All in all, I firmly believe we are well placed, on a sound, solid footing to take advantage of the economic recovery as and when it occurs.

Richard Pepler

To date the first six months of 2009 has been the most active period for Ultimate Finance culminating in our financial year end to 30 June 2009 giving record results. Our distinctive approach has contributed to a substantial rise in the number of new client enquiries and wins over the last six months – a trend that continues.

In July we announced that Lloyds TSB increased the company’s funding facility from £18m to £25m, also extending the term from two to a minimum three years. In the current economic climate, with lending so tight, we see this as an endorsement of the business.

The company continued to expand over the year. The opening of a new centre in the south east in 2008 underlined our commitment to providing a high-quality service that is responsive and locally based. The operation has proved a huge success and two months ago moved to new, larger offices in Tunbridge Wells, under the direction of our regional managing director, David Wright, who was recently appointed to the board of our main trading subsidiary, Ultimate Finance Ltd.

Our northern operation is also doing well. Continued expansion has necessitated our central Manchester office moves to larger premises in
the coming months, positioning us closer to the heart of the region’s financial community and our key introducers.

Ultimate Finance now operates across England and Wales, with an integrated network of staff in nine locations, linked to regional offices in the south west, south east and north.

Since July 2007 the SME sector has been affected by rising numbers of business failures. We have protected the company from the negative influences of this by applying principles of
prudent lending.

Whilst we have experienced a significant increase in new enquiries, we have been selective in taking on clients. We have avoided taking unnecessary risks, chasing market share for its own sake, and straying into unfamiliar markets. We have taken a broad view, focusing on quality businesses with solid foundations and credible management.

We have built close personal relationships with all our clients, communicating with them so we understand what is happening in their businesses. This approach, together with our enforcement of strict underwriting and risk management procedures, has proved its worth in these challenging times.

I see opportunities for growth in the invoice finance sector. Recession has created a surge in new enquiries and many businesses are questioning the merits of the overdraft as a source of funding. This, combined with our sector’s in-depth understanding of the needs of SMEs, positions the sector well to explore a number of exciting growth opportunities. In times of tightened credit, companies turn to asset financiers such as factoring and invoice discounting – and we at Ultimate intend to take advantage of this situation whilst adhering to our core principles of strict, robust business assessment and underwriting.

Consolidation in the industry during the past six to 12 months brought with it a number of challenges but also opportunities. Ultimate Finance has not only weathered this storm, it has made strong progress. We are cautiously optimistic that the company is able to capitalise on these challenges and opportunities ahead. We countered a negative trend by focusing on the fundamentals of good business and sound lending and by adhering to our long-term strategy.

We began our new financial year in July with a truly national sales force that is not only bigger, but also substantially better. We benefit from a seasoned risk management and support team, plus a portfolio of very sound clients. We believe we are therefore well positioned to emerge from this recession as an even stronger player.

Peter Ewen

2009 has seen Venture Finance celebrate our 20th birthday, and the first six months have certainly seen the industry witness some dark clouds and choppy waters. However the good ship Venture has steered a constant course in our support of UK businesses as they attempt to weather the storm.

As part of the ABN AMRO group, and ultimately owned by the Dutch government, we enjoy solid backing and liquidity. We have been very much open for business as companies seek out robust, responsive and reliable methods of funding in lieu of now dried-up traditional sources of finance. Whilst new business acquisition figures were below expectations at the start of the year our hard work has returned dividends and Venture’s deal activity increased significantly, with figures now in excess of pre-credit crunch levels.

We found the focus at the beginning of the year to be very much on refinancing and restructuring and sadly saw a higher proportion of businesses failing – in common I believe with most of our competitors. We have seen the number of new clients wanting to guard themselves swell – businesses emerging from this recession will do so, stronger and wiser. Indeed the first half of this year has seen the option of bad debt protection increase from 33% to 56% year-on-year with Venture typically being able to provide 75% cover on our clients debtor book. With credit insurance today proving to be as elusive as the promise of a barbecue summer these figures are testament to the very good work of our credit team who take time to understand our client’s business and maintain an excellent relationship with our insurers.

ABL has increasingly enjoyed popularity with businesses. Our own research among 1,000 accountants corroborates that the number of business clients being refused finance by traditional lenders virtually tripled this year. Additionally, 60% reported they had seen an increase in business owners proactively seeking to learn more about other methods of funding.

As the decline of the economic downturn eases, we have been pleased to fund a number of growth deals and even acquisitions and the rate of client insolvency has steadied. All encouraging reasons for cautious optimism for the second half of the year and we look forward to helping businesses around the country prepare for post-recession opportunities. It’s my belief that ABL will have a huge role to play in the economic recovery and Venture will certainly be ready to rise to the challenge.

Indeed with Venture entering its third decade, the recent months have been a time of reflection for me personally both on Venture Finance as a company, and on the ABL industry in general. It is my conviction that the industry has reached a watershed precipitated by the recession and that, if managed astutely, could see ABL finally recognised as a, mainstream, business funding option. It’s time to shed the misleading term of alternative funding and shout louder about its key advantage of service levels – crucial in today’s market.

We’ve put service at Venture’s heart since inception. The very embodiment of service of course is the ability to listen and at Venture we’ve a history of flexibility and innovation born out of responding to markets needs. That ethos has driven a back to basics review our core proposition this year, and the launch of our newly streamlined fast track factoring process. It’s already proving a popular move with both our introducers – to whom it gives greater transparency – and new clients by providing fast access to finance when and where it is most needed.

This move addresses the lack of finance currently available to UK businesses and we have also added to our fantastic range of services by providing additional funding through the government’s Enterprise Finance Guarantee scheme. Meanwhile our Structured Finance division continues to be active in what remains a difficult market, offering a full range of ABL facilities. And here too there are encouraging signs for the latter half of the year as the deal-making paralysis begins to reduce.

It is far too early to declare the recession over, but at Venture it certainly feels as if we have turned a corner and it’s an exciting time of opportunity for our industry. It’s my belief ABL will be a cornerstone of the economic recovery, and play a crucial role in enabling companies to emerge from the recession in a position of strength.