Need a Bank Loan to cover book debt?

Are you considering taking out a bank loan to cover your cash flow crisis due to book debt. Times may have been good and you have been far too busy running your business to worry about collecting that small debt that has been hanging around for sometime. Besides they’ll get round to paying it, won’t they? Suddenly times are not so good and if only everyone paid up on time you’d been ok. Using your book debt as security for a bank loan is not so easy now and lots of lending institutions are not interesting in helping you tide over in the bad times. So the only option may be to be pro-active in collecting those debts.

So what can you do? Here are a few tips to help:-

Know your customers. It is more difficult for people to delay when you know them and speak to them on a regular basis. You also get to know those that has a policy of holding of payment until the last possible moment and those that may be in real financial trouble. You need to make sure that your bill will get paid first and making regular phone calls pressing for payment will push your bill to the top of the pile.

Its never too old. Unless its over 6 years that is. Debts up to 6 years old can still and should be actively collected. Even more so if they are not regular customers. If you have supplied a “one off” order then you can be much more aggressive in pursuing payment.

If that fails a Solicitors letter should be the next step. Statistics show that businesses that attempt to collect their own debts are only 70% successful on 90 day invoices and this falls to 50% when a debt becomes over 6 months old. In order to get your invoices paid it is necessary to make sure that your debt becomes a priority when payments are being made.

Issuing proceedings in the County Court should always be the last resort but sometimes this is unavoidable and that’s where our experience and help could assist you in keeping your cashflow moving.

If you would like to contact our Litigation Department, please contact us on 01992 558411 or by e-mail.