Credit Today online

There's an interesting paper on the future of trade credit published by credit insurer Atradius - available on their website www.atradius.co.uk (see under latest publications on the home page).

Are you taking greater risks with new business to close the sale?

Are your major buyers dictating longer terms?

Hi James,

Our job I guess is to take risks but manage them and we have always done this (with a fair measure of success I will add). Recent pressure means a little more of the same. What we are finding however is a greater willingness on the part of clients to offer us the required level of security where we feel it is required. I'd like to say that banks and others are willing to provide some flex when clients seek to offer trade suppliers security but this alas is not always the case. Some are willing to exclude debt assignment to a trade supplier offering waivers to cover new charges filed but many are not.
I also see a major shift in bank attitude and more so in their funding invoice discounting or factoring arms, (RBS is a classic example), adopting a much tougher line in funding provision and critically, reducing facilities at the drop of a hat and with little or no warning. A clear sign they are reinging in debt in many quarters to repay taxpayer loans. Expect to see a rise in business failures again second half of this year.

Unfortunately, it seems that opinion is growing that we will go back into recession...... www.ft.com/cms/s/0/430cb878-879e-11df-9f37-00144feabdc0.html