Letter to the editor: SME finance

Sir The Asset Based Finance Association (ABFA) disagrees with the viewpoint of Eric Anstee and his assertion last month that banks are withdrawing existing factoring arrangements for SMEs. The ABFA’s members are not generally withdrawing factoring arrangements and not lowering the percentage value of the invoices to be repaid.

Asserting that many banks are reducing the percentage value from 90% to 50% is simply not true and we are not seeing this from our members. Instead, our members are committed to helping SMEs and are continuing to ­support businesses through providing a wide range of factoring facilities.
Kate Sharp, chief executive, ABFA

Eric Anstee replies: Obviously Kate Sharp has a different perspective, but as a corporate finance adviser I am seeing a number of situations where banks ­continue to call this type of facility or reduce cover. I have two specific cases which are now in administration or have been sold from administration due to the banks’ view on the future.

I am gratified that, in future, where companies are facing this issue, they can call Kate and she will presumably follow up with her members. I am happy for you to publish this view in response as it may help some struggling SMEs.

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