Get Ahead in 2018, Get Credit Managed

The fact that late payment remains culturally acceptable after 20 years of concerted legislative effort to neutralise it suggests that it’s here to stay. Far from being a handicap, credit can be a source of competitive opportunity if looked at strategically alongside the right finance choices.

According to recent research by BACS, late payment is still the big problem facing SMEs in the UK. Costing more than £2bn ever year, at any time SMEs are owed £14bn.

Taking this in the context of lending in the UK today, business has more choice than ever before as lenders seek to fill the funding gap. Whilst many will reach for traditional loan and overdraft facilities, others are exploring the versatility of asset-based lending (ABL) to boost working capital.

Asset-based lending is not as dependent on economic conditions because it is based on asset values and therefore has the flexibility to fund businesses through every economic cycle. ABL can be applied to all stages of the business and all objectives – organic growth, restructurings, acquisitions, MBOs and turnarounds.

Business competitive advantage is not merely a function of the strength of the marketing mix (product, logistics, promotion, price and people) and the availability of cash. It is also crucially a function of credit management capability. Almost a third of companies face delays of at least a month beyond their terms and nearly 20 per cent are having to wait more than 60 days before being paid. To combat this, it is important to keep the maxim ‘a sale is not a sale until it is paid for’ as close the heart of business culture as possible.

If strong credit management is combined with great lending solutions like ABL, business capability can be formidable. Cash is applied directly to business objectives and not handicapped by being diverted to plug leaks created by badly behaved customers.

Veritas Commercial Services is working more and more with businesses, their lenders and private equity sponsors in ensuring lending is as efficient as possible by injecting strong credit management into the mix.

In an era of Brexit uncertainty, UK business has all the tools to win.

We would like to extend a big thank you to all our business, lending and private equity clients in making 2017 such a strong year for business.

Let’s do it all again, and more, in 2018.

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