Research results: 20% of UK SMEs have received fraudulent references by job seekers

Figures from the latest Close Brothers Business Barometer results show that one in five UK SMEs has received a fraudulent reference for a job candidate.

Of those, over half (56%) say that it has happened up to five times in the last five years alone. Worryingly,10% have received more than 10 dishonest job references in the same time period. The survey has revealed that false references are most commonly received for mid-level (51%), and entry-level (45%) positions.

Not surprisingly, the volume of fraudulent references has a correlation with the high number of employers that are unaware of the existence of websites that charge for false references (56%).

For more details from our research and for feedback from David Thomson, CEO of Close Brothers Invoice Finance, take a look at this article - and other news items - here on the Close Brothers Invoice Finance website.

Case study: "I don't know how we managed without invoice discounting"

We have recently written a case study with the help of our customer at London Toughening, a specialist manufacturer of glass products in the South of England.

Financial Controller, Maria Demetriou was hesitant about using invoice discounting as she felt it would be expensive. After 18 months with Close Brothers, Maria has told us that she didn't know how the business managed before. The overdraft facility the business had with their bank was restrictive and was holding the company back from the substantial growth that invoice finance has now allowed. Maria has recognised that the beauty of invoice discounting is that it grows with your business rather than being a static amount that may or may not be sufficient.

Please click here to go to our website and read the full case study.

If you have any questions, or are interested to know how our invoice finance products could help you or your client's business, please get in touch by calling free on 0808 252 0353.

Protecting your business with bad debt protection

Another way that we are proud to stand out from the crowd is with our 100% bad debt protection service. This works alongside your invoice discounting facility and enables you to operate safe in the knowledge that you will not be affected by potential bad debts from your customers.
While most other providers only cover up to 90%, we can protect you against up to 100% of your customers, providing they are all approved by our Credit Team. But don't take our word for it, here's a testimonial from one of our BDP clients and if you like the sound of it get in touch with us now and you can have the first 6 months cover absolutely free*!

Isomass Ltd is a soundproofing company, supplying goods to the construction industry. The business has been providing a wide range of domestic and commercial building solutions since established by company directors, Iain Mair and David Bignell, in 2007.

Challenge

David and Iain had considered the funding options that would suit the size of the business and the nature of the industry they operated in. They chose a factoring arrangement with a Credit Control Team that they could trust to chase any debtors for unpaid invoices, leaving them to concentrate on growing their business.

With limited initial resources, Isomass had recognised that chasing outstanding customer invoices would burden sales at a crucial time. In addition, knowing that they would be covered if any customers had difficulties paying was seen as essential.

Solution

Close Brothers Invoice Finance provided a £75,000 factoring facility, and Isomass Ltd also took advantage of our bad debt protection product. Working alongside the factoring arrangement, this service provides essential cover against any potential loss that might otherwise not be recovered. David said, “You never know what can happen – even big companies can face financial difficulties and bad debt protection gives us peace of mind to know that the business can progress even when faced with customer insolvencies”.

Result

Since working with Close Brothers, Isomass Ltd has experienced two instances of bad debt which could have lost the business over £4,000. Besides providing cover against any credit approved customers getting into difficulty, Isomass know they can rely on the expertise at Close Brothers to help them make informed decisions about new customers.
David commented: “The team at Close Brothers Invoice Finance are great to work with and I know I can rely on them to chase my outstanding customer invoices and offer valuable advice. By allocating a percentage of my profit to the bad debt protection service, I can sleep at night, safe in the knowledge that my business is protected.”

*Terms and conditions apply

Biggest quarter ever for asset based finance as businesses borrow a record £18.9bn

Press release from the ABFA:

• Jumps 7% in three months and 10% in a year
• Largest companies account for almost a third of all advances

The three months to June 30th 2014 was the biggest ever quarter for asset based finance, with a record £18.9 billion of funding provided to businesses, says the Asset Based Finance Association (ABFA), the body representing the asset based finance industry.

According to figures from the ABFA, the combined amount of invoice finance and asset based lending provided to businesses leapt by seven per cent in the last quarter, from £17.7 billion in March 2014, and 10 per cent in the last year, from £17.3 billion in June 2013.

The ABFA says that demand has partly been fuelled by constraints on traditional lending, but that is has also gained traction as more businesses gain an understanding of how borrowing against the value of their invoices and other assets can free up cash to invest in growth.

The ABFA points out that it is not just SMEs – typically seen as the hardest hit by constraints on traditional lending - who are making use of this facility.

Almost a third (31 per cent) of the total advanced through asset based finance in the last three months was used by companies with an annual turnover of more than £100million.

The ABFA explains that 80 per cent of asset based finance is invoice finance, in which businesses secure funding against their unpaid invoices, while the other 20 per cent represents the fast-growing area of asset based lending, in which businesses can raise money secured against a range of other assets they own, including inventory, property and machinery.

Jeff Longhurst, Chief Executive of the ABFA says:

"Asset based finance is a proven tool for growth, enabling companies to increase their funding as they grow. Asset based finance is funding record levels of new jobs and business investment."

"What's becoming increasingly clear is that asset based finance such as invoice finance in particular, is the alternative to traditional lending for SMEs that the Bank of England and the Treasury have been looking for."

"We are seeing more and more businesses of all sizes and types taking advantage of invoice finance to fuel their growth, particularly as more traditional forms of lending remain subdued. More businesses are viewing their invoices as what they are – one of their biggest assets."

"Asset based lending is fast becoming a standard part of the finance suite for bigger businesses. As the economic recovery hits its stride, having funding that automatically expands with your business is a huge bonus. The ability to increase the size of your borrowing facilities as your business grows is one of the biggest strengths of asset based finance."

"That's a big plus for many businesses, because they don't have to keep re-evaluating their funding position and proving themselves to their lenders."

Amount of asset based finance advanced to businesses hits record high…

…While traditional lending to businesses falls by more than a fifth

The full statistical release, along with historical data are available at: https://www.abfa.org.uk/members/statistics.asp