News & Blog

EU Late Payment Regulation- yes another piece of regulation but we may not be able to blame others for this!

The UK was one of the first countries to introduce late payment legislation and is already seen as an exemplar across Europe and this regulation is due to come into force in March this year.

The main points in the EU Directive are that:

· Public authorities will be required to pay suppliers within 30 calendar days of receipt of an undisputed invoice. (This matches the UK Government’s standard practice for the public sector).

· For business to business payments, the period for payment fixed in the contract should not exceed 60 days, unless otherwise expressly agreed and provided such terms are not grossly unfair.

· It copies current UK practice of a default payment period of 30 days, where terms have not been agreed.

· There is a minimum €40 (approximately £31) for compensation. (Current UK legislation sets three levels of compensation payment according to the value of the payment). Suppliers will not be prevented from seeking to claim additional recovery costs.

The EU late payment directive is due to take place on or before 16 March 2013.

So what are the implications for your business- as ever with government and EU directives, no one quite knows at the moment.  It's coming, but will anything really change, how and who will enforce it and just because there is legislation if you win a valuable piece of business and they want longer terms- will you turn it down? (remember if it's expressly agreed it's still fine) and if you don't and you take the client with extended terms on, how do you finance the contract and deal with the creditor pressure this may bring you when you cannot pay your bills on time?

Here we can help, the principals at Kinetic have been financing invoices (late or otherwise) for over 20 years, so if you would like to discuss this further and look at the options open to you, contact us NOW

Now I am quite good at getting you the finance you need but you do have to be in lenders parlance "Honest & Trustworthy" for me to deal with you.

These guys had an alterntative approach, which did work for a while, Unfortunately it all came at a price.

 (Reuters) - Two businessmen have been found guilty in London of defrauding banks of hundreds of millions of pounds to fund a lavish lifestyle and build a commercial property empire, in their second conviction for deception and forgery in 18 years.

London-based Achilleas Kallakis and Alexander Williams, both aged 44, persuaded Allied Irish Banks to lend them 740 million pounds by using forged documents and fake property guarantees between 2003 and 2008, the Serious Fraud Office (SFO) said on Wednesday.

The loans enabled Kallakis to build a 16-property portfolio.

The fraud, which included an agreement from HBOS, now part of Lloyds, included a multi-million euro loan Kallakis said was to convert a passenger ferry into a super-yacht. Around six million euros of that loan was advanced.

A third person, Swiss lawyer Michael Becker, was director of companies involved in the loan agreements and was closely involved in the fraud, the SFO said in a statement. He was not charged as he lives abroad and is outside the SFO's jurisdiction.

The jury, which returned unanimous verdicts on two counts of conspiracy to defraud, were told Kallakis maintained a fleet of chauffeur driven Bentleys, a private jet, a private helicopter, a luxury yacht moored in Monaco and high value art.

Kallakis and Williams, an expert forger, have been remanded in custody awaiting sentencing on Thursday.

The two men, who changed their names after being convicted in 1995 of selling bogus honorary titles mainly to Americans, operated out of an office in London's plush Mayfair district as the Pacific Group of Companies.

They pretended a respected Hong Kong company, Sun Hung Kai Properties (SHKP), was guaranteeing long-term, top rents for commercial properties. This inflated the price of the properties to 60 million pounds above their cost, the SFO said.

They also provided false guarantees from a company called Oregon Finance Corp, which Kallakis said was a billion-dollar ship-owner belonging to his family trust. Oregon Finance, however, had millions of pounds of liabilities and no assets.

During 2007 and 2008, Kallakis agreed a 29 million euro HBOS loan for the boat conversion. He provided the bank with documents that included a death certificate of his mother in which her surname was altered to hide Kallakis's name change.

But by August 2008, AIB discovered that Kallakis had a previous fraud conviction in the name of Stefanos Kollakis. They contacted Hong Kong's SHKP, which confirmed they had not offered Kallakis any rent guarantees.

and in a similar vein

Two ex-HBOS bank managers charged in 35 million pound loan fraud

(Reuters) - Two former employees of bank HBOS have been charged by prosecutors over business loans made through a high street bank for about 35 million pounds, the Crown Prosecution Service said on Tuesday.

The pair, who were charged with six others, were described in the CPS statement to be senior managers for the bank and were charged with conspiracy to corrupt, fraud and money laundering.

The men were given numerous high-value gifts by a financial consultancy in return for appointing the firm to administer bank loans to companies in trouble, the CPS said.

As an alternative to the above(!), for Honest, Ethical and Responsible Lending to help your business grow and be succesful Call Kinetic and see how we can Deliver with Impact

Have been working with a few clients lately looking at different aspects of Leadership and what makes a good leader as opposed to just a good manager.

Nothing revolutionary here and a quick Google search (other search engines are available!) brings up many examples, but sometimes it can be good to remind ourselves what we should be aspiring to (though I see in the papers today there is talk of leaders being born and some identifiable tag being apparent in the DNA of leader- but for the rest of us these might be of some use).

Some more common aspects of leadership below:

A Leader needs to have vision and this must be a clear vivid picture of where to go as well as a firm grasp on what success looks like and how to achieve it.

Good business's leaders create a vision, articulate the vision, passionately own the vision and relentlessly drive it to completion.

Leader must be able to communicate the vision in terms that cause the followers to buy into it, and they must communicate this clearly and passionately as passion is contagious.

A good leader must have the discipline to work toward his or her vision single-mindedly, as well as to direct his or her actions and those of the team toward the goal. Action is the mark of a leader, always doing something in pursuit of the vision, inspiring others to do the same.

Some Key words that identify a Leader:

A Sense of Humour, Integrity, Sense of Fair Play dedication, credit where it’s due, openness, assertiveness.

• An appropriate sense of humour  is vital, effective leaders know how to use humour to energize followers. Humour fosters good camaraderie.
• A person of integrity is the same on the outside and on the inside. Such an individual can be trusted because they never veer from inner values, even when it might be expeditious to do so. A leader must have the trust of followers and therefore must display integrity. This includes making those difficult decisions that include letting those choose not to contribute know they are no longer a match for the companies’ purpose and ambitions.
• Closely linked to this is the send of Fair Play, dealing with others consistently and justly. A leader must check all the facts and hear everyone out before passing judgment. He or she must avoid leaping to conclusions based on incomplete evidence. When people feel they that are being treated fairly, they reward a leader with loyalty and dedication.
• Dedication is spending whatever time or energy is necessary to accomplish the task at hand. A leader inspires dedication by example, doing whatever it takes to complete the next step toward the vision. By setting an excellent example, leaders can show followers that there are no nine-to-five jobs on the team, only opportunities to achieve, together, something great.
• A magnanimous leader ensures that credit for successes is spread as widely as possible throughout the company (where it is due). Their role is to create heroes not be one. Conversely, a good leader takes personal responsibility for failures. To spread the fame and take the blame is a hallmark of effective leadership and draws the team together.
• Openness is being able to listen to new ideas, even if they do not conform to the usual way of thinking. Good leaders are able to suspend judgment while listening to others’ ideas, as well as accept new ways of doing things that someone else thought of. Openness builds mutual respect and trust between leaders and followers, and it also keeps the team well supplied with new ideas that can further its vision.
• Creativity is the ability to think differently, to get outside of the box that constrains solutions. Creativity gives leaders the ability to see things that others have not seen and thus lead followers in new directions. 
• Assertiveness is not the same as aggressiveness. Rather, it is the ability to clearly state what one expects so that there will be no misunderstandings. A leader must be assertive to get the desired results. Along with assertiveness comes the responsibility to clearly understand what followers expect from their leader.

not sure what mentoring is? Have a look at one of our short videos- link below then come and join us at www.rockstarmentoringlive.com.

http://vimeo.com/54779672

Had a lovely email from a client thanking us for the help we gave, copied below

"Sorry I've not a chance to reply sooner but its been an extremely busy period for us over the last two weeks!

But just wanted to say thank you very much for your assistance and advice, it has been invaluable and yes we did negotiate hard with XXXXX to get the deal and terms we were happy with, and I think ultimately it provides everything the company will need to grow.

We also had to push our Bank hard who wanted to reduce our funding as a result to keep it at its current level and made the business case to them for this, which they in the end agreed with also which is excellent.

So thanks again for your help - we would definitely like to work with you again in the future and I have numerous friends who own companies who I am sure may have a need for your services in the future - in that situation I would be delighted to refer them.

In the meantime, thank you again it was a pleasure working with you, we were very impressed by your professionalism and knowledge."

R A

President - International Sales and Distribution 

I wouldnt normally find humour in any business failing, but there is a certain schadenfreude associated with this.............. 

The International Centre for Financial Regulation has been placed into voluntary administration. 

The administrators were appointed after the board of the ICFR  became aware that a significant sum of money appeared to have been removed from the organisation’s bank accounts, without authorisation of the board. 

The sums potentially involved were sufficiently substantial to raise questions over the organisation’s ability to continue to operate.

To ensure that there is no possibility of trading while insolvent, the board has taken the decision to suspend the ICFR’s trading activities.

The introduction of the Seed Enterprise Investment Scheme (SEIS) from April 2012, a development of the existing EIS, enables investors who invest in start-up businesses to claim a 50% income tax refund as well as cancel any capital gains tax incurred during the current tax year. This therefore means you can get a potential 78% tax relief on your investment, in addition to the exemption from capital gains tax on the subsequent disposal of the SEIS investment.

The maximum amount an individual can invest in a SEIS company is £100,000.

There are obviously various conditions that the company has to comply with to meet the SEIS criteria and most importantly there is a very large chance that the company might fail due to it being a start-up and the risks associated with such companies are greater than with established businesses. However, this is not all bad news as there is further tax relief that can be claimed if the company fails, which means that the overall combined tax relief to which you may be entitled could be as much as 100.5% of the original investment!

If you feel that you would like to take advantage of this type of investment and the tax relief’s that you could be entitled to then we are able to put you in touch with companies who have been approved for SEIS and have a strategy to hopefully return your investment.

NOTES

For investors keen to see what a SEIS has to offer, here are some of the important points to consider:

• SEIS investors can input £100,000 in a single tax year which can be spread over a number of companies. Any one company can raise no more than £150,000 in total via SEIS investment.
• Investors cannot control the company receiving their capital and have more than a 30% stake in the company in which they invest
• Investors can receive up to 50% tax relief in the tax year the investment is made, regardless of their marginal rate
• The business company must be a UK company and have a permanent establishment in the UK
• In the 2012-13 tax year, tax payers can roll a chargeable gain on the disposal of assets in the tax year in to shares qualifying for SEIS income tax relief, with a full capital gains tax exemption.
• The company must have fewer than 25 employees. If the company is the parent company of a group, that figure applies to the whole group.
• The company’s trade must be no more than two years old.
• The company must have assets of less than £200,000
• The company has to trade in an approved sector – generally not in finance or investment, for example, a property company raise capital as a SEIS.

Thanks to some great introducers (and funders) we have been able to complete on a number of exciting transactions over the last month or so.

Below are just some samples of recent deals completed by Kinetic Business Advice

·         £250,000 Bridging Loan for short term stock funding need

·         £3,700,000 Confidential Invoice Discounting Facility for supplier of Health Care Practitioners                                                      

·         £1,000,000 Stock Finance facility for high end, on-line, Fashion store

·         Engaged to help expand and reposition Metal Broker

·         £30,000 Asset Finance for new IT Servers

·         Mentoring for Start Up Dance Company

·         £200,000 Spot Factoring facility for phoenix photocopy business

·         £100,000 Trade Finance Line for Rare Earth Trader

·         £500,000 Single Debtor construction Finance and Re-Banking

·         Mentoring for voice coach

Kinetic Business Advice- Delivering with Impact

I thought it was just me.........

We have completed on a number of bridging loans recently- not for their traditional purpose of buying and selling property, but rather for SME's who need short term cash pending receipt of funds, the sale of stock or assets to tide them over  or  indeed finance to purchase stock with the debt outstanding until the goods are sold.

As part of this we are also seeing that this is not just a one off but once used the client turns to this type of funding on several occasions, repaying the loan and going again.

Quick to put in place and no hoops to jump through to use again and again (though expensive), it may perhaps not be the best way to solve a business’s funding needs, but in the continuing climate it can be a very useful solution for those with a property asset to support the finance.

And it’s not just us providing this to our clients- see the findings at the end of this blog from United Trust Bank as reported by Business Money.

As we have said to lenders on a number of occasions what the SME really wants is an Overdraft facility and whilst it is reassuring that the entrepreneurial finance companies are filling the breach to some extent with alternatives to their product ranges, the lender that comes out with a well-priced overdraft “style” product will not only get the grateful thanks of the business community but also I am sure make a lot of money in the process.......watch this space

Survey Findings

Over 80% of brokers have used bridging finance for purposes other than a classic bridge in the last year. The findings come from a recent survey carried out by United Trust Bank and reveals that brokers are using this flexible lending product other than simply to bridge the gap between a property purchase and sale.

The different uses to which bridging finance is employed is perhaps one factor driving the reported growth of the sector and explains why a majority of brokers are confident that they will continue to place increasing levels of bridging business in a relatively flat property market.

Nearly a quarter (23.9%) of brokers placed over £5m of bridging business in 2011

• 9.4% placed £10m or over
• 39% of brokers placed between £1m and £5m of bridging business in 2011.

The survey found that 64% of brokers expect to place more bridging business in 2012 than they did in 2011 whilst 24% expect levels to remain steady.

Commenting on the research findings Alan Margolis, head of bridging at United Trust Bank said:“When you mention bridging loans the first thing that generally comes to mind is the classic bridge used to bridge the gap between a purchase and a sale. However, our survey shows an increasing number of brokers are realising that bridging loans can be used for many different purposes from capital raising to solving short term cashflow problems and that there are a myriad of scenarios for which bridging may be a suitable solution.

“In my view the varied use of bridging finance is an important driver behind the growth in the sector and supports the survey’s findings that many brokers’ will continue to place significant amounts of bridging business. As more brokers introduce their clients to bridging they will discover more varied uses for this flexible financing solution.”