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The first session got the conference off to a cracking start. Gijs
Wildeboer openly presented IFN Group’s strategy for renewing high
margins within the Dutch small business market.
The model is based around strict productisation; rigid products
processed by online systems that can be provided on a ‘white label’
basis to strategic partners such as banks and credit insurers.
Process automation reduces labour cost and provides quick turnaround
for good customer service, and partnership broadens channel
opportunities whilst sharing the sales overhead.
As a general business model, the MBAs among you will probably have
studied it years ago, but invoice finance has been slow to respond.
This model has potential and could give independents a relatively
low cost option for international development. IFN appear to be
totally committed and are already reporting higher margins since the
system launched in October 2004. Brokers; watch this space!
The partnership theme followed with Ted Ettershank and Martin
Cooper’s joint presentation on Lloyds TSB Commercial Finance’s
experience in opening new markets with deal syndication.
This is the opposite end of the spectrum to IFN with syndication
typically used for deals in excess of $100m where exposure is too
great for a single lender. Nonetheless there was a common message
between these first two presentations – partnerships will provide you
with opportunity but choose carefully, ensure you have complimentary
styles and that all parties understand their roles.
There was another important message in the LTSBCF presentation; big
deals require all-asset funding and to be successful in syndication
you have to understand the whole deal.
The second session was kicked off by Hendrik Harms of Deutsche
Factoring Bank with an honest appraisal of the German market under
the heading: “Exploring the Implications of Basel II and Factoring”.
The message was clear – poor economy, high risk, too many lenders
and over regulated. It all sounded very depressing but then
factoring is still relatively small in Germany, growth has averaged
18.3% over the past four years and SMEs are facing increasing credit
charges against traditional loans as the banks attempt to rescue
profitability. There is opportunity here for those brave enough to
take on the challenge.
Atlantic Risk Management’s Richard Hawkins, took us through to lunch
with his client time line theory and left us with the fundamental
risk management poser: “Did we understand the exit route at the
beginning of the timeline?” A question that came back to haunt me in
the wee small hours.
The afternoon sessions included introductions to the Czech and
French factoring markets by Jiri Matula of Transfinance and
Jean-Philippe Guillaume of CGA respectively, with Jean-Philippe also
providing a detailed account of CGA’s process improvement and
service focus models.
Jan Becher completed the first day’s presentations with an overview
of International Factors Group’s latest product, Hot and Cold
Backup. Designed as a pre-emptive service agreement between direct
export factor and import factor in which active support from the
import factor can be evoked without time critical setup and
negotiations.
IFG control the service level agreement and arbitrate in disputes. A
logical initiative, but the question of whether or not there is
enough business available to keep the import factors happy remains
unanswered. Hot and Cold Backup has been operational since October
2004.
The conference then split into nine round table informal discussion
groups before a quick break and back down to the conference suite
for a more relaxed networking session at the HPD-sponsored ‘Paris
Party’.
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