Bad Debt Protection key for businesses during the credit crunch

More than half (53 per cent) of UK accountants believe that having Bad Debt Protection in place is important for business in the current economic climate, according to research released today from Invoice and Asset Based Lender, Venture Finance.

The loss of liquidity in the debt market has already seen companies face difficulties when trying to refinance, resulting in businesses of all sizes experiencing an increase in late payments and bad debt. 2008 has already seen recognisable high street firms, such as Stead and Simpson, Dolcis, The Works Retail and MK1 fall victim to the credit crunch.

Forecasts are now showing that the number of business failures between 2007 and 2009 is expected to increase by 18 per cent [1]. It comes as no surprise that many SMEs are feeling vulnerable. It is important for businesses to take measures to not only maintain a steady cashflow, but also to protect themselves against late payment or even customer insolvency.

However, there remain scores of businesses that have no protection in place, often a result of having misplaced confidence in their customers. Just one in five (20 per cent) of the accountants surveyed had business clients currently looking into Bad Debt Protection services.

Source: creditman.biz