“Whilst there is now mounting criticism regarding the lack of bank lending, banks have also previously been criticised for irresponsible lending. It is essential that banks and funders ensure that responsible frameworks are in place for the benefit of the whole economy. Whilst economic figures have shown growth, the reality is that day-to-day trading remains tough. Therefore, looking at funding solutions which allow greater levels of flexibility and growth in line with turnover is an excellent way of ensuring funding is available when any opportunities arise.

“Taking all of this into account, I think we will start to see an increase in the use of alternative forms of funding, such as invoice finance, where providers have the scope to look beyond rigid financial criteria. This would also allow them to consider the wider picture of a business’ health and suitability for the many tailored solutions available to assist the UK SME.”

Evette Orams - MD, Hilton Baird

Contributed by Hilton Baird

For centuries, business people have been treating their favourite clients to corporate lunches, Christmas gifts and other tokens of their appreciation. However, when the Bribery Act 2010 comes into force this April, some of these ‘standard practices’ may well become criminal offences.

Much of the worry stems from the fact that the Act does not clearly define what a ‘bribe’ actually is. According to the legislation it could be a payment, a financial inducement or in fact “any other advantage”.

Jonathon Newman, Brightstone Law LLP, said, “The lines of acceptability are somewhat vague. Each case is fact sensitive and a degree of caution and good sense will need to be applied in each instance.

“So, in terms of corporate entertainment, hosting a small get-together at your office for a broker may be perfectly reasonable and acceptable, but treating an introducer to an all-expenses-paid trip to Monaco for two weeks for a single transaction may not be.”

To add to the severity of the Act, for the first time ever companies will be liable for the corrupt activities of third parties as well as their own staff.

The Financial Services Authority (FSA) has predicted that many broker firms will be liable under the new laws because “there is significant risk of illicit payments being made to, or on behalf of, third parties to win business.”

Yet despite these warnings, many brokers and lenders know very little about the Act. Some heard about it for the first time just few weeks ago.

Gavin Diamond, Head of Finance at Cheval, said, “I have not seen any recent press about the Bribery Act but was alerted to it by our compliance consultant.”

James Rainbird, MD of Pink Pig Loans, added, “I only heard about the Act in January during an Association meeting, but my ears were certainly pricked when I heard the news. I think it is inevitable that this will affect businesses within the financial sector. We have always declared our fees and the remunerations received from our lenders, but I am sure not all companies do the same.”

The level of concern from brokers and lenders within bridging and commercial lending differs hugely, with some saying that they are not at all concerned and others doing all they can to learn more about the Act and protect themselves as a consequence.

In terms of corporate hospitality, the overall opinion seems to be that ‘reasonable’ practices, where there is no intention that improper business transactions are carried out, will remain acceptable after April.

Gavin Diamond said, “It must stand to reason that the Act is aimed at preventing the inducement to act improperly rather than rendering de minimus corporate gifts and entertainment to be illegal. I can only hope that guidance notes will be published to assist companies in putting practical procedures in place to prevent getting caught out by the new Act.”

James Rainbird added that the opinions of a company’s legal team will play a large part in the way a company changes its activities as a result of the act.

Some lenders though are actually welcoming the Act. Mark Posniak, Head of Marketing and Operations at Drawbridge Finance, said that there are “definitely some positives” to be gained from the Act because it will help to create a “level playing field”.

“We already disclose all our payments to brokers and we are not overly concerned by this latest Act. I don’t think that companies who offer a good product and have a good proposition have ever worried about bribery because there is no need for it,” he said.

Over the next few weeks we will continue to learn more about this Act and how it will be imposed upon financiers on a day-to-day basis. But the real consequences of the Act will not be known until after April, when it is likely that a company will only discover that it is guilty after the sentence has been made.

Article contributed by Katie-Jill Rowland – Editor, http://www.bridgingandcommercial.co.uk/

Image copyright: Flickr

Having steered a path through what is undoubtedly the worst global recession in living memory, Leumi ABL is pleased to look back on 2009 and report continuing growth: discounted turnover has almost doubled and both client numbers and funds-in-use have increased.

As clients seek to maximise available funding, the market appetite for structured asset-based lending facilities continues to grow.  Stock, plant and machinery are featuring in increasing numbers of deals alongside invoice finance as clients see this as a more flexible way to fund growth plans.  Now that many banks are reluctant to increase, and in some cases, continue overdraft facilities Leumi ABL has seen an increase in deal flow opportunities and this looks set to carry on.

Notable deal successes during 2009 include the backing of Walstead Investments, with its acquisition of Southernprint in July when Leumi ABL provided a £4 million facility in financial support.  Another significant print sector deal came in October with a £25 million working capital facility to a major UK printing group.

Supporting niche manufacturing businesses, Leumi ABL provided a £2.75 million confidential invoice discounting facility and a £200,000 stock line to two of Domes of Silence Group’s subsidiaries: Aluminium Shapes and Windmill Extrusions.  In a deal completed in November, Leumi ABL and its parent, Bank Leumi (UK) Plc, together provided a range of acquisition and working capital facilities to Polestar Foods to support their acquisition of the non-branded frozen desserts business of HJ Heinz Frozen & Chilled Foods.

Finance providers who can demonstrate trust, agility and flexibility are making a real impact, and have the potential to build a greater presence in the market as opposed to their position pre-crunch.  Many banks are moving into what they perceive as the higher value market, particularly with invoice finance where there has been a degree of consolidation.  Leumi ABL is exploiting this opportunity with the recent launch of Leumi Invoice Finance, tailored to the needs of smaller businesses.  The combined facilities of Leumi ABL, Leumi Invoice Finance and Bank Leumi (UK) now mean that clients can be supported with funding solutions at all stages of their business life cycle.

With the mood in the market more upbeat than at this time last year, we are funding new fledgling companies out of the recession and seeing many successful businesses which have been hampered by their bank’s reluctance to support them through tough times.  Real recovery may be slow to emerge, but we are seeing many good businesses across the UK that are well placed to thrive.

Due to the challenges of the past year, clients and their introducers are now looking for more certainty with any deal.  There is very little speculation in the market at present and this is likely to remain for a considerable time.  Introducers are looking for funding providers they can truly work with and who are serious about doing business.

As we enter 2010, Leumi ABL has a full pipeline of transactional work and much to build on as the economy begins to emerge from recession.

Article contributed by Phil Woodward, Managing Director, Leumi ABL

Email: pwoodward@leumiabl.co.uk
Tel: 01273 716202
Mob: 07900 802774
Website: www.leumiabl.co.uk

Additionally, non-accruing loans continued to trend downwards, which, according to the CFA, represents further stabilization in the asset-based lending market.

“It’s clear that asset-based lending filled a crucial access to capital void in the third quarter,” said Andrej Suskavcevic, CEO, Commercial Finance Association. “Due to the sound business practices inherent to asset-based lending, our members continue to have the ability to provide vital financing to businesses of all sizes and across all industry classifications. While the overall credit market is still ripe with uncertainty, businesses should look beyond their traditional bank and explore how asset-based lending can provide them with the capital to sustain or grow their operations. ”

Businesses in need of financing are encouraged to utilize the CFA’s free online service, “Find a Lender,” by visiting www.cfa.com.

The Quarterly Asset-Based Lending Index was conducted by R.S. Carmichael & Co., an independent market research firm, to measure business growth, credit commitment, credit line utilization and portfolio performance of the 19 largest CFA members engaged in asset-based lending. The survey was commissioned by the Commercial Finance Association. For a full copy of the survey, or to interview a CFA executive, please contact Mike Trainor at (919) 674-6020 or mtrainor@sacherokee.com.

Original article here: http://finance.yahoo.com/news/Commercial-Finance-iw-1525873025.html?x=0&.v=1

Article image copyright: Flickr