Only 3% of Carillion’s trade creditors insured themselves!

Only 3% of Carillion’s trade creditors insured themselves!

Comprehensive Non-payment Credit Insurance, Funding, Whole turnover trade credit insurance
As many of our readers will know, the construction and outsourcing services provider Carillion collapsed two weeks after the start of 2018 weighed down by the massive £2.2 billion debt and pension liabilities, which became the largest corporate bankruptcy in the UK in a decade. As it turned out, the vast majority of UK suppliers to Carillion did not buy insurance against the risk of not being paid for the goods and services they provided. Out of the estimated losses of £1.2 billion, only £31 million was insured with trade credit insurance insurers according to ABI, amounting to less than 3 percent of their losses. The chain reaction from the insolvency is now forcing many of its SME suppliers to lay off personnel. To prevent finding your company in a…
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Transition deal with EU necessary to prevent 15% rise in insolvencies in 2019

Transition deal with EU necessary to prevent 15% rise in insolvencies in 2019

Comprehensive Non-payment Credit Insurance, Funding, Political Risk Insurance, Whole turnover trade credit insurance
A whopping 15% rise in insolvencies and a 8% fall in business confidence in 2019 is forecast if no transition agreement is in place. Euler Hermes, one of the credit insurance providers that LiquidityCo works with, has forecast that in the worst case scenario, leaving the EU on World Trade Organisation (WTO) terms after the two-year negotiating period finishes in 2019 could result in 3,300 additional British companies falling into bankruptcy. This 15% rise year-on-year would increase the total insolvencies in the UK to 25,100 businesses just in that year alone. On the other hand, EH's research predicts that a soft Brexit which would include signing an agreement with the EU by March 2019 will significantly soften the negative economic impact of exiting the EU. Insolvency levels could rise by…
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Reverse factoring – a secret weapon in SME finance?

Reverse factoring – a secret weapon in SME finance?

Comprehensive Non-payment Credit Insurance, Funding, Whole turnover trade credit insurance
On the one hand, many banks are becoming increasingly risk-averse and conservative in today's economic and regulatory climate. On the other hand, as a CEO or a finance director of a business, you are very interested in diversifying your financing sources. One of such sources is the undeservingly little explored and utilised reverse factoring, which actually brings massive positive elements to a business. It offers companies both better returns on working capital employed and reduces the amounts of required risk capital to be deployed in the business. So how does this supply chain financing instrument work? Just as in traditional factoring, the supplier cashes in its receivables immediately upon invoicing thanks to a financing provided by the factor while the buyer pays as to the factor as per its normal…
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Financial distress among UK businesses on the rise

Financial distress among UK businesses on the rise

Comprehensive Non-payment Credit Insurance, Whole turnover trade credit insurance
A customer's default on a payment can have a devastating impact on a business. Both with existing and new customers, what limits and terms of credit can be offered them is a question most companies struggle to answer. Many companies just hope that they would get paid and yet 155,000 UK businesses got their fingers burnt last year when they suffered a total loss of £3.7bn from non-payments by their business customers which went insolvent. In 2017, particularly turbulent times await those businesses active in logistics, wholesale and food manufacturing sectors. According to Begbies Traynor, an insolvency specialist, these sectors have seen year-on-year increases of 46%, 16% and 15% respectively in the first quarter of 2017, amounting to tens of thousands of companies. Overall, levels of significant financial distress has…
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UK SMEs missing out on over £250bn of cashflow because of slow and late payments

UK SMEs missing out on over £250bn of cashflow because of slow and late payments

Comprehensive Non-payment Credit Insurance, Whole turnover trade credit insurance
According to a recent study by Siemens Financial Services, SMEs are an integral part of the UK economy, accounting for 47% of all private sector turnover. They bear the brunt of late payments and long payment terms. Businesses (with turnover of under £1m) wait for 72 days for payment. Businesses with an annual turnover of £1m-£10m wait on average 53-54 days, and the largest businesses wait on average 48 days. A typical SME spends 130 hours a year chasing outstanding invoices. The cost associated with this time taken is £10.8 billion per year. Unpaid invoices account for 14% of SMEs’ annual turnover. These costs combined mean that SMEs are missing out on over £250bn of cash flow. Outstanding bills are viewed as a drain on cash flow, yet finance products…
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Receivables risk management

Receivables risk management

Comprehensive Non-payment Credit Insurance, Whole turnover trade credit insurance
Receivables is usually the largest part of any balance sheet and yet many businesses protect their desks and walls, but not receivables. Some typical balance sheets of UK-based companies look like this: Yet, businesses don't pay as much attention to their trade receivables as they do to their fixed assets or office equipment. Time we realise what potentially has the highest impact on the company's top and bottom lines.
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Industry sector breakdown of UK company insolvencies for 12 months ending Q3’16

Industry sector breakdown of UK company insolvencies for 12 months ending Q3’16

Comprehensive Non-payment Credit Insurance, Whole turnover trade credit insurance
Total new company insolvencies in England and Wales by broad industry sector, year ending Q3 2016 According to the Insolvency Service, in the twelve months ending Q3 2016, the highest number of new company insolvencies was in the construction sector (2,441 – down 0.5% from the 12 months ending Q2 2016). The second highest number of new company insolvencies was wholesale and retail trade & repair of motor vehicles and motorcycles sector with 2,052 new company insolvencies in the 12 months ending Q3 2016, which was a decrease of 0.6% compared to the 12 months ending Q2 2016. In Q3 2016 the five industry sectors with the highest number of new company insolvencies were ‘construction’; ‘wholesale and retail trade; repair of motor vehicles and motorcycles’; ‘administrative and support service activities’;…
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Sharp jump in business bankruptcies in Q4 of 2016

Sharp jump in business bankruptcies in Q4 of 2016

Comprehensive Non-payment Credit Insurance, Whole turnover trade credit insurance
The last quarter of 2016 saw a massive 53% jump in business bankruptcies compared to the previous quarter. The number of bankruptcies in the United Kingdom increased to 5564 companies from 3633 Companies in the third quarter of 2016, according to research from the Office of National Statistics / Trading Economics. This is 65% more than the average of 3360 bankruptcies per quarter since 1975 and only 14% off the all-time high reached in the 3rd quarter of 1992. In Q3 1992, almost twenty five years ago, the all time high of 6509 companies went under. The current level is six times greater than the record low of 924 companies becoming insolvent in the second quarter of 1979. Last quarter's number is also about 10% more than the peak reached…
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Startup funding calculator

Startup funding calculator

Comprehensive Non-payment Credit Insurance, Whole turnover trade credit insurance
An excellent online tool to calculate startup funding requirements has been built by Y Combinator founding partner Trevor Blackwell and is available here. To protect these revenues from non-payment by customers, do not forget to reduce the risk by insuring and/or selling your receivables. We at LiquidityCo will be more than happy to assist you in building a prudent policy around your growth and sales. Please don't hesitate to send us a short enquiry to discuss your business and see how much you can save by avoiding the very real potential losses of customer non-payments.
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UK to see the sharpest rise of insolvencies across the EU in 2017

UK to see the sharpest rise of insolvencies across the EU in 2017

Comprehensive Non-payment Credit Insurance, Political Risk Insurance, Property insurance products, Whole turnover trade credit insurance
According to Euler Hermes, one of our panel insurance companies, the UK is expected to face the sharpest rise in business failures of any EU economy over 2017. Euler Hermes predicts that 20,254 UK companies will fail in 2017, up +5% on 2016. In contrast, total corporate insolvencies in Western Europe will fall by -4% in next 12 months. Recent global downward trend in insolvencies to reverse in 2017. The UK will record the largest increase in bankruptcies of any EU economy in 2017, with the number of businesses going insolvent predicted to reach a total of 20,254. The forecasted upswing in failures will be the first rise in the UK since 2010 and follows a -3% cent fall in 2016. The increase in UK business failures is due to…
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Free quotes for your credit risk or funding requirements

Free quotes for your credit risk or funding requirements

Comprehensive Non-payment Credit Insurance, Political Risk Insurance, Property insurance products, Uncategorized, Whole turnover trade credit insurance
If you are working on a transaction or with a portfolio which exposes your organisation to potential losses from credit or political risk events, please get in touch. We are happy to offer our customers a free no-obligation quote service from Political And Credit Risks ("PCR") for all of your funding and credit insurance needs. Just pick up the phone or fill in our simple contact form with the description of the risks you are looking to cover and a specialist from PCR will be in touch with quotes. If you have a quote from another source, please send it through as well and we'll be happy to beat it for you.
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Insurance solutions for the commercial and residential property sector

Insurance solutions for the commercial and residential property sector

Comprehensive Non-payment Credit Insurance, Property insurance products
Growing solid business and in need of financing? Consider releasing your cash reserves sitting idly as a deposit for your premises. Our dedicated service SaferLet has developed unique insurance solutions enabling clients unfreeze cash tied up in property deposits, while giving equivalent or even better security to their landlords - both commercial or residential. Please visit our specialist website - SaferLet.com for more information.
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Global economic trends in brief

Global economic trends in brief

Comprehensive Non-payment Credit Insurance, Political Risk Insurance, Whole turnover trade credit insurance
Persistent low oil prices led to 10 energy companies with a cumulative turnover of EUR8.5bn filing for bankruptcy in the US in 2015 and 6 others (cumulative EUR3.4bn) ended up in a similar situation in Canada. Chinese state support for capital intensive sectors is fading away in favour of SMEs and high-tech research and development, as well as other high-end activities. China’s steel industry is particularly affected – overcapacity pressure – the largest insolvency worldwide in 2015 with Sino steel, worth EUR26bn, gone bankrupt in October 2015. Insolvencies are projected to increase by +2% worldwide in 2016, and by +2% in 2017. Too-low-for-too-long growth, turbulence in some sectors (commodities) and the domino effect of major bankruptcies. In 2015 152 top bankruptcies by companies with sales >EUR100m vs 95 in 2014.…
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Vlad Shipov speaks at the Credit Risk in Energy Trading conference

Vlad Shipov speaks at the Credit Risk in Energy Trading conference

Comprehensive Non-payment Credit Insurance, Political Risk Insurance, Whole turnover trade credit insurance
Our MD spoke at the Marcus Evans conference held 21-22 November 2016 at Hilton Canary Wharf, London, United Kingdom, to a group of energy sector experts on the importance of counterparty risk management in the current economic climate. Vlad shared his knowledge gained from many years with various major banks, insurers and insurance broking companies on how to effectively protect against counterparty political and credit risks while optimising costs on sourcing potential insurance protection. Various examples of different risk transfer structures used by companies and financial institutions were provided to illustrate the concepts in more detail to the commodity and credit risk specialists in the audience.
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