Posted by Stewart Wilkinson, Partner
On 1 September 2016 Withy King LLP merged with Royds LLP. The trading name for the merged firm is Royds Withy King. All content produced prior to this date will remain in the name of the firms pre-merger.
Businesses step up protection against bad debt risks
Demand is growing for trade credit insurance among businesses keen to protect themselves against financial difficulties in trading partners. Companies specialising in insurance broking and risk management, are seeing growing demand for trade credit insurance, which gives protection against non-payment or extended default, as a result of fears that expected interest rate rises could result in more corporate insolvencies.
As a result of the recession many organisations are more risk averse and are aware that even a slight increase in bad debt and interest rates could derail their firm’s recovery as the economic outlook improves.
Businesses are still concerned about the impact an interest rate rise might have on their trading partners. Trade credit insurance provides an added element of credit management discipline and customer insight, as well as protection against trade debt.
It is thought that businesses are more likely to experience difficulties during the recovery when sales are rising. It is expected that more firms will increasingly use trade credit insurance as they look to grow throughout 2014.
Putting in place trade credit insurance could prove to be a wise investment for businesses that want to take proactive steps to protect their financial position. Otherwise, businesses will need to rely on taking their other debt recovery options, which may entail using court proceedings.
At Royds, our experts can provide expert advice on all aspects of debt recovery and insolvency; offering practical solutions on the options available for businesses in order to help them manage their debt. For more information, please visit or contact Stewart Wilkinson or Ashok Patel.
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