Coface
Avoid the pitfalls of early years’ trading N
ew business creation has rocketed in the UK since 2013. Another 89,000 enterprises joined the ranks of VAT or PAYE listed companies in the year to March 2015, according to recent official figures1. This is great for the British economy and highlights the mettle and determination of British entrepreneurs. But if they are to make it beyond the first five years in business, these start-ups need to steer a careful course between growing sales and maintaining a healthy working capital. One of the greatest threats to this objective is the spectre of bad debt. Whether it is caused by customer insolvency or default, bad debt causes potentially fatal interruptions in cash flow, making it difficult for affected businesses to meet their existing financial commitments, let alone invest resources in raw materials and manpower. As well as being a blow to morale, dealing with the fallout is a timeconsuming and costly distraction. The good news is that it is possible to trade safely and grow if you work with an experienced credit management specialist. Coface’s credit insurance policies help companies of all sizes to protect their domestic and overseas trade. The business benefits are: Informed decision-making You can assess the financial health and trading behaviour of prospective customers before deciding whether to
New businesses have to be prepared to supply goods on credit terms to attract customers but this means running the risk of bad debt. Coface’s Grant Williams explains how credit insurance can help you to trade safely and maximise your opportunities
offer credit terms, and be alerted to a sudden change in an existing customer’s credit risk before it is too late. Coface’s database holds information about the creditworthiness of over 65 million companies worldwide and its UK underwriting team are always available to discuss and advise on credit limits. Market research Coface economists produce regular reports on industry sector and country risks which provide a valuable information resource when researching new markets. Country risk assessments examine strengths and weaknesses, including macro-economic indicators, insolvency trends and in many cases, an index of payment incidents recorded by Coface underwriters. These reports are freely available at http://www. cofaceuk.com/Economic-studies Cash flow protection Credit insurance protects policyholders against losses arising from bad debt because of a domestic or overseas customer’s insolvency or protracted late payment. Coface pays all claims within 30 days, while claims of up to £17,000 are paid within five days on average. There are a range of Coface policies to meet the needs of different types of businesses. Debt recovery Coface’s trained collections team recover payments professionally and often at
a fraction of the usual time and cost. Collection agents are multi-lingual and experienced in debt collection in the UK, Ireland and overseas.
‘Whether it is caused by customer insolvency or default, bad debt causes potentially fatal interruptions in cash flow, making it difficult for affected businesses to meet their existing financial commitments’ Improved investment prospects Credit insurance often helps reassure suppliers and investors that a business is financially sound, helping it to obtain better financial terms and access additional working capital. Efficient credit management Coface clients can view their customer portfolio, obtain credit limits, notify overdue payments and make claims using CofaNet, a secure, online policy management tool. For more information about Coface, contact us on 01923 478111 or visit www.cofaceuk.com Reference - 1 UK Business: Activity, Size and Location, 2015, ONS, 06 October 2015
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