Poor old Geneva Finance. Last week I mentioned in the Good Returns Weekly Wrap that Standard and Poor's two-notch downgrade of the company, from B+ to B- seemed like pretty rough treatment from the rating agency.

As you could expect S&P were on the phone pretty quickly after reading the comments.

Since then plenty more has happened and it leaves lots of questions and thoughts in my mind.

A week ago my proposition, and I know it was one shared by many others in the industry, was that they felt S&P had essentially given Geneva some rough treatment.

The reading of the situation was that Geneva was talking to some institutional crowd about taking a stake in the business and the discussions would be concluded soon.

My thoughts are that S&P had already put the company on a Credit Watch and if this was the issue then it should let the discussions run their course.

However, reading S&P's statement it appears that its view was that Geneva's risk profile had changed and therefore it had to downgrade the company two notches.

No doubt S&P will defend itself by saying that if it came across information that changed its views then it was obliged to act, rather than sit on the fence.

It's very difficult to argue against that.

However, what I, and many others don't know, is how did the risk profile change? No one in the know is providing details or information.

What is clear though is that S&P's downgrade probably did a good job in triggering the next series of events. Namely Geneva asking its clients for a moratorium and S&P dropping the company to a D rating.

One could assume that the previous downgrade from B+ to B- immediately stopped funds flow. A D rating is like giving it the death penalty.

I hope that Geneva survives and comes through this. It is one finance company which has worked hard to set standards (eg: a rating) and has put in place measures (a wholesale funding line) to help it if the market deteriorated, as it has.

It seems unfair that a company which has tried to do the right thing gets hammered like this.

It also shows that the rating from a crowd like S&P can work against the company. In some ways the past week has showed people who ratings work.