Measured response to ABFA claims!

Jeff makes some interesting points in his reply; I would say that we should never challenge the right of free independent journalism that is ‘regulated’ unlike the factoring industry. He is right that asset based lending is worryingly not covered by any financial regulation or the PRA and is instead covered by the Sale of Goods Act 1979 which also covers pawn shops. I do not believe when the Act was written that was designed to cover sophisticated financial products which even ABFA seem to be unable to work out the cost of borrowing from their members.

 He has failed to mention that appalling abuses of his members clients on an industrial scale that has been exposed in the Telegraph, Times, FT and the Treasury Select committee to name a few. The Telegraph led with an example of broker(s) been given substantial incentives to find struggling SMEs to put into insolvency to profiteer on their assets at the expense of HMRC and other unsecured creditors.

 He challenges RABF to give him example(s) of 90+% APR from his members – that can be easily be done. To work out how much factoring will cost is simple; There is a monthly admin fee based upon the maximum facility a company will require, an interest charge of x% above base rate and where necessary a mandatory invoice insurance. You put those into the Growth Street APR calculator and job done. Cleary the asset based finance industry like to keep this as a black art to hide the obscene profits.
Brian Moore
Campaign for Regulation of the Asset Based Finance Industry
www.rabf.org.uk

http://www.altfi.com/article/1613_sme_finance_space_short_on_transparency