Originally posted 2010-12-27 07:13:34. Republished by Blog Post Promoter

A recent publication of the Daily Mail ran with a headline of “small firms bled dry by the banks” and the article discussed the fact that big finance houses were lifting profit margins on loans by a third and at the same time they were reducing lending by 43%. An example was presented of a small company owner who had banked with Lloyds for the last 47 years and his company had never made a loss, then when he asked for a loan to expand his company, the local branch set out reasonable terms, but had to send the paperwork to head office for approval. On return they discovered that the interest rates had been doubled, as had the administration costs and what is more they wanted him to put up everything as collateral. Naturally, the small company owner did not accept the loan offer and is now moving finance houses.

If this is the mind set taken by finance houses for a small company that is financially in good health and is looking to develop, then what approach would they take if a small company needed a loan to get them over a difficulty? Probably the finance houses won’t pay any attention to them after they saw that they actually need the loan, so for the small company they should communicate with the large company to ascertain when they expect to settle the overdue invoice. If the result is not a satisfactory one, then the small company might be best to look into Debt Collection and try to locate the best means of asking the large company to settle the overdue invoice, without laying out a lot of money. If the small company think that the normal Debt Collection way of using legal practices or Debt Collection Agencies is preferred, then they might well need to look into the costs, which are around 10% to 20% or more of the invoice total. For this amount, the small company might realise that this might be a big proportion of their profit and one that they might not be prepared to give up. The normal legal practices and Debt Collection Agencies should be working to Fair Debt Collection Practice that would help to safeguard the professional relationship with the large company, but in these times the poor financial climate has seen an increase in the numbers of Debt Collection Agencies and legal practices that are offering business to business Debt Collection services. It would be almost expected that some of these newer legal practices and Debt Collection Agencies would not follow Fair Debt Collection Practice as they might well be only after the money as fast as they can get it.

The small company might well have no way of distinguishing the good from the bad legal practices and Debt Collection Agencies and might not want to see their professional relationship being ruined by the legal practices or Debt Collection Agencies not working to Fair Debt Collection Practice. Their best move might well be to try out Debt Collection software, since they can do the Debt Collection process with their own resources and thereby be in control of the interaction with the large company. A good Debt Collection software application can cost around £40, which should not be seen as a large outlay, since the small company can reuse the Debt Collection software as many times as they want without paying anything else. legal practices and Debt Collection Agencies however, will recover their fees every time. The small company members of staff will need to have guidance on the Debt Collection process, especially the Fair Debt Collection Practice and then how to compose Debt Collection letters. This guidance should come from the documentation that comes with the Debt Collection software application or possibly online from the web site of the Debt Collection software company.

So, by working hard to learn about the Debt Collection process and using Fair Debt Collection Practice when both generating Debt Collection letters or contacting the large company in other ways, the small company should be able to persuade the large company to pay the overdue invoice and for a lower price that by using legal practices or Debt Collection Agencies.

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