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My introduction to the invoice finance market came at the tender age of 19, when I joined the cash department of Goode Durrant and Murray Ltd, where they were pioneering a particular form of selective invoice discounting. Over the next two years I rose through the ranks until I reached the elevated position of sales representative with a car and a whole country to sell a product that no one had heard of. They hadn’t heard of factoring either at that time I might add!

I later made one of the key moves of my career to what at the time was one of the market leaders in factoring in the UK, Alex Lawrie, working as a salesman alongside the now legendary Ted Ettershank. He covered south east England and I the south west. I suppose we must have done some business but all I remember was the fun we had. This provided me with an excellent further teaching ground and I was fortunate enough to work my way up through the ranks from sales manager to a director of the company via the operations department. In 1983 I was persuaded to leave Alex Lawrie by the opportunity to bring invoice discounting US style, already extremely popular over the pond, to the UK as managing director of the start up, Boston Financial Company, a subsidiary of Bank of Boston. This marked an extremely exciting period for myself and for the industry as we saw the invoice discounting sector boom until it was outperforming factoring. Following a successful sale of the business to TSB Group in 1987, for whom I worked for the next two years, my next move was another new venture – Causeway Invoice Discounting Ltd (CIDCO), an invoice discounting specialist business. Having guided the company through the recession of the early 90s the company was sold to N M Rothschilds in 1996.
 
My career history, and the number of start ups with which I have been involved reveals, I suppose, that I am an entrepreneur at heart and that when anything gets to any size I seem to be off, but my current venture is definitely my last. I made a half-hearted attempt at retirement back in the early 2000s, but was soon seeking out a new challenge, which was realised when I launched Ultimate Finance with Richard Pepler in 2002. My involvement in all of these businesses, leading them from start up through to acquisition, in the case of Boston Financial and CIDCO, now Five Arrows Commercial Finance Ltd, and a successful floatation on AIM with Ultimate, has afforded a great deal of personal and professional satisfaction. It has also provided me with a valuable insight into what companies need and expect from financial service providers. I have an extremely clear view of what I require and thus am similarly focused on the type of service that I want to offer to my clients. One thing that has remained the same throughout my time in the industry is the importance of building and maintaining personal relationships, both with potential clients and introducers, alongside a demonstrably excellent service. This is something that we put into practice everyday at Ultimate, and will continue to do, however large the business becomes.

It is no secret that invoice discounting and factoring have faced a number of challenges over the years, fighting first its reputation as a “last resort” form of financing and later businesses’ reluctance to turn away from more “traditional” financing routes. I am proud to say that the industry has shown a tenacity and flexibility that has overcome both of these to establish itself as a credible and successful alternative in the business finance market. In this I believe it has been supported by its trade organisations. I have always championed the role of the trade body within any successful industry believing that they play a vital role in establishing and maintaining high standards and providing opportunities for personal development.

I became involved in the ABFD earlier in my career and was a founder director of the FDA in 1996. My role within both has been heavily focused in the provision of education courses, initially via the ABFD and latterly via the FDA Educational Trust, something that I believe has played, and will continue to play, a key role in the growth of the sector. Needless to say, we didn’t get any training in the 60s and 70s – we had to learn everything the hard way!
I have worked with many good people in my career and like to think I have helped some promising careers along the way. I obviously taught Ted Ettershank all I knew at the time (not very much), and eventually handed my seat at TSB Commercial Finance onto him and have variously had the likes of David Hogg, Paul Saunders, Murray Chisholm, Neil Livingstone, Jeff Longhurst, Steve Websdale, Eileen Creely, David Smith and, Carole Weatherhead somewhere in my organisations at various stages over the years, and they’ve all not done too badly have they?

Of course I have witnessed many changes throughout my career, but one that has pleased me the most is the degree to which the market has diversified, although this was really where the US market already was when I joined Bank of Boston in the 80s. There is now a varied and sophisticated range of products available in the UK provided by a healthy mix of independents and high street banks. There is definitely a place for both, particularly as the independents tend to lead the way on quality of service being smaller and more nimble on their feet.

The statistics bear out the place that invoice finance is carving out for itself in the business finance industry. According to the FDA, by the end of last year more than £11bn was advanced to SME clients through factoring, invoice discounting and asset-based lending, whilst figures from the British Bankers Association showed funding to SMEs to stand at only £8.9bn.

However, there is still clear scope for growth which will be lead by the big bank factor, discounters and the so called asset-based lenders (we are all asset-based lenders actually, but some of us on just one asset!) and I believe we still face the not inconsiderable task of educating UK businesses in the full range of benefits that invoice finance can offer. Similarly I think we should be wary of viewing invoice discounting and factoring as only the preserve of the SME market. SMEs will undoubtedly remain a core source of revenue, having access to enough working capital is an issue that affects all businesses, and more and more businesses are seeking the increased flexibility that invoice discounting and factoring offers. It also seems likely that we will see invoice finance working increasingly alongside other financiers to provide funding packages for larger deals.

Another key development in the industry is the role that technology now plays. IT solutions have advanced beyond all recognition and allow us to offer added value services that would not have been possible even 10 years ago. At Ultimate, for example, our clients have access to a sophisticated system, that offers up to 70 screens of financial information, enabling them to gain an overview of their cashflow in real time and analyse their business sales. Not only does this allow clients to monitor our performance but they can also use it as a business development tool by analysing sales. We are constantly on the look out for the next new development and I predict that there will be further innovation in IT that will continue to enhance not only service levels but also productivity.

Our sector continues to be one of the fastest growing and most competitive in the UK, however we should not rest on our laurels. Despite attempts to legislate against it late payment is not going to go away and businesses will always be looking for ways to improve their cashflow and grow and develop their businesses. As we move into 2007, and my 41st year in the industry, I would urge all those involved in the industry to continue to push the boundaries of customer service, product diversity and flexibility to ensure that the market continues to grow and prosper as I have always believed it should.
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Brian Sumner, managing director, Ultimate Finance,
tel: 0870 8721010,
www.ultimatefinance.co.uk

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