The Business Secretary Claims That Banks Are Unwilling To Lend To Small Businesses So This Could Make A Late Invoice With A Large Organisation A Much More Urgent Priority.
A report by Will Smale who is a Business Reporter for the Beeb entitled “Bank lending to small firms still a mixed picture”, references a recent interview with Vince Cable, the Business Secretary as saying to the effect that finance houses are declaring that they are offering financial help but small enterprises aren’t interested, but that isn’t right. Mr Cable then says that the bar has been set too high and no one is prepared to jump. This is in answer to the fact that the finance houses are setting interest rates high and forgetting about this as a factor in the lack of takers for their business finance deals. For a small organisation that is getting short of funds because of an late invoice with a large organisation this could well feel like a catch 22 situation. If after contacting the large organisation they don’t get an acceptable response they could feel that their only hope is Debt Collection to try and get the invoice settled. Not surprisingly, if the small organisation used RBS or Nat West then they could have been given financial support as these are state financed finance houses, but even so these finance houses will still look at the commercial viability when assessing any applications for extended overdraft facilities, so getting this invoice paid is a priority.
The paths that are available for Debt Collection come down to one of the typical paths such as Debt Collection Agencies or solicitors which specialise in business Debt Collection, or a more hands-on option of Debt Collection Software. As cash is a significant factor in the decision for the small organisation, this could rule out Debt Collection Agencies and solicitors as their rates are in the range of 10% to 20% or more of the invoice value. Debt Collection Software on the other hand costs around £40 for a decent suite. There are some other factors on the financial side, in that the Debt Collection Agencies and solicitors deduct their price from the invoice after collection, whereas usually the Debt Collection Software would have to be paid for, unless it was obtained from a credit supplier. Also, the Debt Collection Agencies and solicitors will charge for each debt they manage whereas the Debt Collection Software is a one-off purchase and can be used as often as the small organisation likes with no further costs to pay.
Using Debt Collection Software means that the small organisation nominates manage the Debt Collection Software suite and also to compose the Debt Collection letters. As it is likely that the small organisation has little or no experience of Debt Collection they could well depend on the documentation that comes with the Debt Collection Software. This should provide them with a clear understanding of how the Debt Collection process works and the important role played by Debt Collection letters. For these Debt Collection letters the documentation should explain any current Acts of Parliament that can be used and also any good phrases as used by Debt Collection Agencies that could help to persuade the large organisation to pay the late invoice quickly.
Discussion | Share Feedback