Mortgage Loans; Business Finance News UK

Business Insolvency Is there a north south divide

2011-12-22T12:46:00.000Z

The latest Insolvency Index from Experian has shown a widening north versus south business failure divide, with southern firms faring far better than those in the north.

London and the South East of England saw insolvency rates fall between October and November, while company failures increased in the North East, North West and Yorkshire.

During November, insolvency rates were highest in the North West (0.14%), North East (0.12%) and Yorkshire (0.11%). By comparison, the South East, South West and Greater London recorded failure rates of 0.07%, 0.08% and 0.08% respectively.

Across the country, there was a small month-on-month improvement in the rate of business insolvencies, from 0.10% in October to 0.09% in November. Out of the UK’s business population, this represents 1,736 firms falling into business bankruptcy in November. In November 2010, the insolvency rate 0.07%.

The average financial strength of businesses in the UK deteriorated by 0.5% in November, falling to 78.07 from 78.44 in October. In November 2010, the average financial strength score was 81.31.

Max Firth, managing director for Experian’s Business Information Services division in the UK & Ireland, said: "The latest insolvency index highlights that some businesses continue to need to assess the risk strategies they have in place very carefully. They need first to understand the risks they are exposed to and then protect themselves from debt that could be detrimental to their business on a regular ongoing basis."

source: bestadvice.net

Struggling businesses should consider turnaround experts

2011-12-14T09:47:00.001Z

With the economic back drop for 2012 set to be rocky on a macro economic level. The Turnaround Management Association urge stakeholders to work together to help struggling businesses.

Business stakeholders are all parties that have a financial and vested interest on the business success or failure, so these will typically include Equity Shareholders, Directors, Lenders / funding partners and significant creditors.

Companies that feel they are at risk should look at these symptoms on the following business turnaround website. Business Turnaround Managers are like a paramedic for your Company, their talent is demonstrated in the ability to make quick and decisive decisions to rescue a company.

There is also a great article on funding a business turnaround here produced by the Turnaround Management Association. (Its a handy PDF.)

New bank accounts for people with bad credit

2011-12-13T22:50:00.000Z

I was really glad when I was told that this product was updated the other day. Its been a major issue for several years now that people with bad credit histories can't get bank accounts. So it was great to here we have updated our bank accounts for bad credit product offering. I know that the accounts do not carry out credit checks so regardless of ccj's or being currently bankrupt a bank account is open for you. For more information on the banking product follow the link to the about page.

Some of the features include a debit card accepted anywhere you see a Mastercard logo, on-line banking, standing orders pretty much every feature you would expect to see from any basic bank account.

Business Insolvency Figures Fall For Large Firms

2011-10-25T16:50:00.000+01:00

The UK’s largest companies experienced a year on year fall in the number of insolvencies during September, according to the latest Insolvency Index from Experian.

Only 11 large firms (those employing 501 or more employees) failed in September 2011, 25% fewer than the same period in 2010.

Across the entire UK business population, the rate of insolvencies increased. 0.09% of British businesses failed in September, up from 0.08% in September last year. The insolvency rate is calculated by comparing the number of businesses that failed with the total business population in Great Britain.

The average financial strength score for UK businesses fell for the seventh consecutive month, to 78.80 in September, compared to 81.05 in September 2010. However, large companies saw their financial strength score improve from 84.63 to 85.87.

Micro businesses employing just one or two people experienced the biggest annual rise in insolvencies during September, increasing by 25% to 258. This represented 0.06% of the UK’s total business population.

Although the North East of England saw the biggest drop in its failure rate from 0.15% to 0.13%, it remained the region with the highest rate of insolvencies. Scotland maintained the lowest business insolvency rate with 0.07%, while the West Midlands witnessed the biggest rate increase from 0.08% in September 2010 to 0.11% in September 2011.

source: Experian Insolvency Index

Business Debts? great article to help resolve

2011-04-08T14:03:00.001+01:00

This is a great article we put out the other day to help business owners who have built up business debts and are having issues with pressing creditors. We title the article: How to legally write off debts and carry on trading

We hope you find it useful.

ifaonline.co.uk Call the FSA’s Money Advice Services

2011-04-05T14:37:00.001+01:00

A great article from ifaonline.co.uk where one of their reporters calls the new money advice service set up by the F.S.A. I was presently surprised.

The launch this week of the FSA's Money Advice Service was met with a healthy dose of cynicism, with some even seeing it as a potential threat to IFAs. Rahul Odedra put in a call to find out...

I initially thought I'd come up with some 'plausible' financial scenario but, after a quick look at my bank account, I fast realised I really did need some guidance.

I am also about to sign up to a company pension scheme, so I thought I'd ask whether it was wiser to put a greater chunk of my income into the scheme, or into an ISA. I am quite young, after all.

I dial the number...

I'm put on hold (for two minutes)...

Julia picks up. After giving her a few basic details (name, age, address), I explain the scenario.

Before we discuss my situation, Julia sets out exactly what she could and couldn't do and mentioned the all-important financial adviser.

"We can give you general information about putting money into pension schemes and into ISAs to help you make your mind up, but I can't advise you," she said.

"That's the job of a financial adviser."

So far, so good.

We then wade through the various advantages and disadvantages of putting money into pensions and the value of shorter-term investments.

At this point, we're essentially discussing the kind of thing that should be taught in schools and which I can't imagine IFAs would want to spend valuable time explaining.

An example:

Julia: "It all depends on how disciplined you can be with yourself. Some people find with an ISA it is very easy to dip into it and it may be tempting to use it, but with a pension scheme you may not be able to access it until you're 55. But it will help to provide you with a comfortable retirement."

Julia then neatly explains the difference between cash and investment ISAs, the annual allowance, and directs me to a few more resources.

Crucially, she explains how a financial adviser could help me choose the right product, going on to explain the difference between 'tied' (soon to be 'restricted') and independent advice, as well as the difference between commission and fees.

I am pleased to hear Julia stress the importance of asking an adviser how they are remunerated.

Julia also explains how I can access an ISA through an execution-only service, details the drawbacks of doing this, and then directs me to some price comparison sites, which "could be a good start".

We finish our conversation.

The truth is this: I felt better-informed after speaking with Julia than I did before. More importantly, at no point did Julia downplay the importance of independent advice.

Anyone seeing this service as a threat to IFAs needs to bear a couple of things in mind: firstly, it is clearly not targeted at the sort of people who would be the client of the typical advisory firm; secondly, it does plenty to tout the importance of professional advice.

I would urge anyone concerned about the service to 'mystery shop' it themselves. If you have time, you should also take a look at the website HERE.

You may be impressed by the information on there, and it probably provides the best explanation of structured products I've seen so far.

Mixed Business Bankruptcy Figures, query insolvency stats

2011-01-04T20:27:00.001Z

A record number of Scots will be made bankrupt in 2011, according to accountant and business adviser PKF.

The firm is predicting that final figures will show about 22,000 Scots were sequestrated (the Scottish term for bankruptcy) or took out a Protected Trust Deed (PTD) in 2010, or 425 a week, and that this year will see even higher levels of personal insolvency.

THE number of people who went bankrupt in Peterborough rose during 2010 making the city one of the worst for personal insolvency. Personal insolvency specialists, RSM Tenon predict that annual personal insolvencies over 2010 are likely to exceed the record level set last year of 134,132. With the upcoming increases in VAT and the inevitable rise in interest rates combined with the public sector cuts, RSM Tenon is predicting continuing record levels of personal insolvencies throughout 2011.

However, The Insolvency Service say that personal insolvency are starting to decline following a steady upward trend over the last ten years.

Confused… I just think 2011 is going to be another bumpy ride, which can only mean that business bankruptcy figures will be difficult to predict.

Convert PDF into Word or Other MS Office

2010-09-01T14:01:00.001+01:00

For all of you frustrated by not being able to edit a PDF this is is a fantastic product that allows you to take a PDF document and turn it into a formatted Excel spreadsheets and more, including PDF to editable Word documents, PDF to PowerPoint (PPT), PDF to Autocad, PDF to Open Office documents, PDF to HTML, PDF to Text, HTML to Excel, and Text to Excel.

Sale and Rent Back Firm Goes Bankrupt

2010-08-20T10:24:00.000+01:00

A sale and rent back housing company based in Manchester has fallen into administration, leaving 375 tenants facing losses that could run into millions of pounds.

The main business of UK Housing Alliance (North West) Ltd was to acquire property from homeowners and rent it back to them. Sellers would receive 70% of the value of the sale, with the remaining 30% to be released as a lump sum following 10 years’ leaseback, provided that they paid top market rent for the full 10-year period.

The administration means that hundreds of families could each be left hundreds of thousands of pounds out of pocket, according to solicitors Berg Legal, which is representing 150 households and administrators for the sale and rent back firm. These 150 creditors alone are said to be owed around £5 million.

Administrators Baker Tilly, handling the business bankruptcy, insisted that the tenants could continue to rent as normal, but the 30% payback was no longer guaranteed.

Payday Loans Explode

2010-08-17T14:12:00.000+01:00

The number of people taking out payday loans has quadrupled over the last four years, according to a new report by Consumer Focus.

In its study - ‘Keeping the Plates Spinning’ - Consumer Focus estimates that the number of people using payday loans has increased fourfold since 2006 to 1.2 million people, borrowing a combined £1.2 billion. Charges typically range from £13-£18 interest for every £100 borrowed, but can be as high as £30 per £100 for some online providers. This can generate APRs in the region of 1000% to 2000% given the short-term nature of these loans.

The research estimates that payday loan borrowers are taking out an average of 3.5 loans a year. Consumer Focus is urging a precautionary approach from industry and regulators to stop borrowers becoming dependent on this form of high interest credit. It says banks need to offer affordable short-term loans as alternatives, as well as recommending stronger safeguards to protect consumers from spiralling payday loan debts.

The research estimated that last year, the average size of a payday loan was an estimated £294 and two-thirds of payday loan borrowers have a household income of less than £25,000.

The study looked at payday lending in the UK and how it compares to the US, where it is a more established form of high-cost credit. Concern about payday loans has led to a number of US states banning them, although there is a lack of conclusive evidence that doing this necessarily helps consumers, Consumer Focus claims.

With limited alternatives available from mainstream lenders, Consumer Focus believes reform of the UK market is needed rather than an outright ban, which could push people into using illegal loan sharks.

Consumer Focus is calling for the number of loans taken out or rolled over to be limited to five per household annually. Where consumers have ‘rolled over’ or taken out loans a maximum of five times in one year, this should be taken as an indicator of financial difficulty and lenders obliged to direct the borrower to independent debt or money advice.

It also wants payday lenders to share information to avoid people borrowing from multiple lenders simultaneously and develop an industry Code of Practice. They should also be forced to carry out more stringent checks to ensure people can afford their repayments, it says.

Consumer Focus also wants banks to provide affordable alternatives for customers needing to take out short-term loans and alternative affordable credit from social lenders such as credit unions need to be further encouraged and promoted by both the financial services industry and the Government.

Chase Saunders Ltd Goes Into Liquidation

2010-08-11T11:02:00.001+01:00

One of the most well-known debt management firms operating in the intermediary sector has been liquidated, owing creditors more than £2.2 million.

Chase Saunders Ltd, based in Manchester, was voluntarily wound up by its directors following a General Meeting on June 30, according to an Equifax alert. The company has now gone into a Creditors Liquidation which is the correct term for business bankruptcy.

The directors have partly blamed a legal dispute with the Office of Fair Trading (OFT) for the firm’s failure. The creditors’ report, from the company’s liquidator, Colin Thomas Burke of Milner Boardman & Partners, states that Chase Saunders went into liquidation with debts of £2,225,541.50. At the time of its demise, the limited company had just £7,407.50 of cash in the bank. It owed nearly £432,000 to HMRC and almost £58,000 to the Royal Bank of Scotland.

Chase Saunders, which started up in June 1999, employed 77 staff at its peak in December 2009, however staff numbers fell to 27 by May of this year, as its online business ran into trouble following intervention from the OFT. The debt management company had invested heavily in online campaigns, spending £125,000 on Search Engine Optimisation and £500,000 on Pay-Per-Click. However this backfired when the OFT restricted the company’s usage of its website last year, as it was seen to be in direct competition with those of debt charities.

According to the creditors’ report, whilst the legal dispute with the regulator went on, Chase Saunders continued to build new websites, which were closed down by the OFT for being “potentially misleading to clients”.

At one point the regulator enacted its emergency powers to remove the websites, leaving the company only able to use chasesaunders.co.uk.
This was said to have a significant impact on the company’s leads. Another factor responsible for the firm’s demise is listed as a “spiral of rumours and negative reviews of the company on review websites and forums”, which led to the amount of enquiries completing falling from twelve per cent to five per cent.
One review site, reviewcentre.com, features scathing comments from consumers and former clients of Chase Saunders, saying that despite paying £500 in fees in some cases, their creditors were never paid.

The last comment, from August 3 2010, states: “I used to work for Chase Saunders, and I am please (sic) to advise everyone that they have gone bankrupt, that is the good news, the bad news is that they have changed their name and in some part will continue trading, so beware. ” Former directors of Chase Saunders declined to comment on the firm’s negative reviews, but assured Debt Management Today that its clients are being managed by a separate debt solutions company, In Touch Financial Services. In Touch Financial Services is currently operating out of Chase Saunders’ offices. Debt expert and director of Atlantic Financial Management, Kevin Still, said that the demise of the debt management company should be a warning to other firms.

He said: “The OFT has significantly stepped up its activities with regard to compliance with the OFT Debt Management Guidance and in particular misleading advertising, including websites. Many debt management companies that were reliant on web advertising and lead generating sites have paid the penalty for not heeding the warnings issued by the OFT.” The Chase Saunders website is still up and even proclaims: “The more debt you are in the more we can help”.

source:debtmanagementtoday.co.uk

CVA – Commercial Voluntary Arrangements up 74%

2010-08-10T10:36:00.001+01:00

The number of company voluntary arrangements (CVAs) increased 74 per cent during the second quarter year on year, according to KPMG’s analysis of official statistics.

After analysing the Insolvency Service’s official figures released last Friday KPMG said transport companies saw the largest rise in CVAs, with a 100 per cent annual increase to 38 from 19, during the second quarter of 2010.

The accountancy firm’s assessment also shows that CVAs among the real estate sector increased 47 per cent to 268 from 182

Sale and Leaseback of Business Assets

2010-08-08T13:45:00.001+01:00

Over the past 2 years its been the number one question I have been asked…”what should I do when my business overdraft get pulled by my my bank manager?”

The answer is always easier said than done… create your own overdraft. That is create a working capital fund that you treat in the same way as an overdraft and one of the most effective ways of creating this pot of working capital is to sale and leaseback unencumbered business assets releasing cash back into the business.

The process is simple and is very much lack remortgaging your home for the purpose of capital raising but within a business context and environment.

To find out more follow the link provided.

Business Insolvencies fall in June

2010-07-28T09:56:00.000+01:00

The latest insolvency index from information services company Experian, has revealed a year-on-year decline in business bankruptcy during June. The overall financial strength score of UK businesses also improved, from 80.83 in June 2009 to 80.66 in June this year.

During June 20101,771 UK businesses failed, 13.4% fewer than in June 2009 when 2,044 firms became insolvent. As a result, the year-on-year insolvency rate fell from 0.10% to 0.09% in June.

At 0.14%, the north east had the highest insolvency rate of the regions in June, with Yorkshire (0.12%) close behind. In contrast, at the opposite end of the country businesses in the south west saw a UK low of 0.07%, while Greater London had an insolvency rate of 0.08%.

Other key highlights include:

· Scotland was the only region of the UK to see an increase in the insolvency rate, up to 0.08% from 0.06% in June 2009

· As well as being the region with the lowest insolvency rate, the south west also held the highest financial strength score (82.50)

· Smaller companies with 11-25 employees saw the greatest year-on-year reduction in the insolvency rate (from 0.29% in June 2009 to 0.20%).

· The largest businesses with 501 plus employees suffered the most since last year, seeing the insolvency rate double from 0.07% in June 2009 to 0.14%.

· The smallest businesses (with 1 to 2 employees) were the only group to see an improvement in their financial strength scores – from 81.33 in June 2009 to 81.95 in June 2010.

· The financial strength of businesses in the transport industry rose from 75.98 in June 2009 to 78.20 – the biggest improvement compared to other sectors. This sector also saw its insolvency rate drop from 0.12% to 0.07% over the year.

· Businesses in the oil industry held the highest financial strength score during June (85.54).

LLoyds Stops Selling Payment Protection Insurance

2010-07-27T13:42:00.001+01:00

Lloyds stopped selling PPI through its Lloyds TSB, Halifax, Bank of Scotland, Cheltenham & Gloucester and Black Horse brands with effect from July 23.

The bank will honour PPI applications on loans and credit cards until July 31, and on mortgages until November 20 but is no longer receiving new applications.

A spokeswoman from Lloyds says: “Lloyds Banking Group has withdrawn its PPI products across all brands and channels. This move reflects the uncertainty around the regulation of PPI sales and processes. The group believes further changes in regulation will make it uneconomic to continue to offer these products in their current form. The Competition Commission ruled in May that it would continue with its plans to ban point-of-sale PPI.

Halliwells Law Firm Now In Administration

2010-07-26T10:50:00.000+01:00

Embattled law firm Halliwells has finally sunk into administration and appointed BDO to handle its collapse.
BDO partners Dermot Power and Shay Bannon have been appointed as joint administrators.

Shortly after the appointment the entire business was sold in a number of transactions to various rival law firms which safeguarded 700 partner jobs and staff roles.

Barlow Lyde & Gilbert has scooped 19 of the firm’s partners who will join its Manchester office. The expanded Manchester practice, which will focus on catastrophic injury, fraud, regulatory and public sector work, is expected to take annual revenue at Barlow Lyde & Gilbert past the £100m mark, making BLG one of the top 25 biggest law firms in the UK by revenue. Former Halliwells litigation experts Helen Bourne and Damian McPhun have also joined the firm’s London office as partners. Rival Hill Dickinson has bought the Halliwell’s 19-partner Liverpool office and the remains of its Sheffield practice

Commercial Mortgage Decision Within 48 hours

2010-07-23T13:57:00.000+01:00

Aldermore, the new UK bank, said that it is now providing 97% of business customers with a decision, in principle, on whether it will lend them money within 48 hours of receiving a completed application.

Aldermore said that other UK banks are now leaving some of their small business customers hanging on for weeks for lending decisions.

Phillip Monks, chief executive of Aldermore, said: “These delays have become a real problem for businesses – they cost businesses money and jobs. Small businesses who want to borrow to invest or to expand deserve to get a quick decision from their bank. Since the credit crunch started well over two years ago they haven’t been getting that.

“We know that businesses want their bank to be reliable and straightforward. That is why we built our systems and IT infrastructure from scratch to give our customers a decision within the shortest possible timescale whilst still undertaking rigorous credit checking.

“Imagine how hard it must be trying to operate a business in today’s competitive environment when for months your bank can’t tell you whether they will lend you the money you need. We don’t want to present businesses with that kind of dilemma.”

Phillip said that as banks have centralised most of their lending functions, staff at branch level have very little input or control over lending decisions or the timeframe in which those decisions are now made.

He continued: “Every week we have creditworthy companies coming to us who have waited two to three months without receiving a decision from their bank.

“To put it mildly they are disenchanted! They feel like they have been strung along. We occasionally face a situation where we need to go back to a business customer for a bit more information but that is really the exception for us.”

The reason some banks are now taking months to give some business customers a decision is partly because they do not want to be seen to be officially refusing loans.

Aldermore has provided a total of £300m of commercial funding to SMEs in its first twelve months.

Financial Claims - Court Over Turned Ruling To Write Off £40,000 Debt.

2009-11-25T11:02:00.000Z

Judges at the Court of Appeal have overturned a decision by a county court judge to write off a couple’s £40,000 debt, in what has been described as an important case which will affect many other claims.

The Cheshire-based claimants, Michael and Suzanne Walker, took out a £17,500 secured loan with Southern Pacific Personal Loans in 2005, but later fell into arrears, with the debt eventually reaching £40,000.

Facing repossession, they sought to get the £40,000 debt written off on the grounds that the credit agreement was unenforceable.

In April of this year, county court Judge Halbert ruled the credit agreement unenforceable and ordered the lender to drop the charge against the Walkers’ property.

However, Lord Justice Mummery at the Court of Appeal said that the ruling had brought on a “spate” of consumer credit litigation, with Southern Pacific Personal Loans facing a number of similar claims from its other borrowers.

The decision was overturned and what would have been a windfall for the Walker couple is now looking more like a further £100,000 of debt, as they’re hit with legal costs from the loan company as well as the threat of losing their home again.

Judges maintained that consumer credit law is complicated and that the county court Judge Halbert had “got it wrong.” They added that the result “will affect other cases in the current spate of consumer credit litigation and potentially many other credit agreements”.

Equity Release Mortgages - Prudential Withdraws From the Market

2009-11-24T14:39:00.000Z

The insurer will stop writing new lifetime mortgage business but it has pledged to continue to service its 14,000 existing customers. It hopes to redeploy the 100 affected staff to other parts of the business.

Prudential is to withdraw from the equity release mortgage sector in the first quarter of 2010 after deciding to deploy capital to other parts of its business.

Mortgage Broker Jailed for 11 Years and Banned by FSA

2009-11-20T15:32:00.000Z

The Financial Services Authority has banned mortgage broker Rashid Farid, after he was jailed for eleven years for conspiring to commit fraud.

Farid committed the fraud whilst trading at Lifestyle Mortgages. He submitted a number of false mortgage applications through Lifestyle Mortgages in 2007 to a lender, using genuine details but without the owners’ knowledge, or after fraudulently altering the details of owners held by the Land Registry.

As a result of his actions, the lender suffered substantial financial losses of £787,050.

Combatting Cash Flow With Invoice Factoring

2009-11-17T20:20:00.000Z

We have found a great article on PR web the on-line news agency that discusses how invoice factoring and invoice finance can offer business the working capital life line they need.

Business owners should take a look invoice finance may be a suitable solution for your business funding requirements.

Last Self Cert Mortgage Lender Stops Lending

2009-11-13T10:17:00.000Z

Beacon Home loans the last self cert residential mortgage lender operating in the UK has today announced that it will stop all new mortgage lending.

All business must be in with the lender by Friday the 13th November 2009 and no new mortgage offers will be issued by Beacon Home Loans after close of business on Friday 27th November.

Beacon’s current mortgage asset purchase arrangements, which have enabled Beacon to lend around £2bn, will come to an end in February 2010.

CIT Group Performs Pre-Pack Administration

2009-11-09T22:26:00.000Z

CIT Group has filed for bankruptcy after attempts at a restructuring or a bail-out failed. This is one of those pre-packaged corporate bankruptcies, from which it will re-emerge reorganised, and with a new management team.

The operating companies themselves, such as CIT Bank, and international operations will not be involved in the bankruptcy filing, and letters have been sent out to customers and suppliers by CIT to assure them they will experience no disruption of service.

Who will be the losers in this bankruptcy then, at this stage it is hard to know, although it has been reported that the US government can wave goodbye to its $2.3 billion rescue capital injection, unless there is a significant and sudden surge in CIT’s share price after the pre-pack.

Asset Based Factoring and Overdraft Survey

2009-11-02T15:47:00.000Z

In a recent survey to business owners and Directors about how their business was funded and whether or they felt comfortable with their current banking relationships. 33% said they were unhappy with their current bank relationships.

20% said that they were currently in negotiations with other banks. 10% had already moved providers already this year. 37% where neither impressed or unimpressed by their current banking relationships

Asked how their business is currently being funding the following was reported. 22% where being funded by Overdrafts, and had not experienced problems.

28% where being funded by overdrafts, however, their providers had in some way reduced the credit available or where having problems.

8% of Businesses asked had had their overdrafts facilities completely removed by the banks in question

42% of businesses asked reported that they where using asset based factoring solutions. With 9% of which stating that obtaining credit insurance on their customers had posed problems to them

Payment of Invoices Get Better In UK

2009-10-30T09:53:00.000Z

UK Business saw in September the biggest month on month improvement in business payment trends since December 2007, Experian’s latest Late Payment Index reveals.

The index shows that on average, businesses in Great Britain were paying their bills 2.06 days earlier during September compared to August, a reduction from 23.60 to 21.54 days beyond terms.