And this means that they are expecting some significant businesses to go bust owing lots of money.
Many of us already use credit status reports from the likes of Experian, Creditsafe and Equifax.
But these only tell you part of the picture as, in the corporate world, the data is scraped (in the UK at least) from that at Companies House.
The information they use can be substantially out of date and could well be blithely telling you to extend credit to a business that is on the brink of insolvency.
Where are we now?
With government support over the last 15 months there are lots of businesses out there who are keeping afloat – and some, only just.
It is highly likely that as that support tails off and loan repayments and interest start falling due, many businesses will be (or ought to be) talking to an insolvency practitioner.
And many of those businesses will undergo insolvency proceedings saddling their suppliers with bad debts.
But it does not have to be this way!
Talking to a credit insurance expert gives you a lot of insider information from the insurers that is not readily available elsewhere.
And were you to take out a policy that insurance covers the risk of a bad debt where a business customer is unable to pay for goods or services you have supplied and provided on credit terms. This is the case even if the customer is insolvent.
So you can really make an informed decision about the level of credit risk you are prepared to run in your business. Best practice would be to then capture this in a risk strategy.
How to put a risk strategy in place?
Credit insurance promotes both better credit control and significantly reduces your exposure to risk from customers going bust.
Tectona proactively look for ways to help you make your life easier. Just drop us a line and we will talk you through the pros and cons of credit insurance and, where appropriate, introduce you to experts in the field.
Tectona Partnership helps business owners sleep at night by embedding one of our 16 commercially minded finance directors in your management team. Very often, a part time solution is the most effective solution.
We make sure you have the necessary management information and strategic insight to make informed decisions and reduce risk; and we will absolutely tell you what you need to know, when you need to know it.