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Bad debt help rises sign of the times.

Byline: Neil Hodgson

THE scale of the credit crunch and the anticipated downturn in business is illustrated in a big upturn in companies seeking protection from bad debt.

Liverpool-based Bibby Financial Services has reported a 200% rise in firms within the north in the past year approaching them for bad debt protection.

They also said twice the number of their clients were also signing up compared with 2007.

Businesses are now seeking protection from the damage unpaid invoices can inflict on their cash flow, with company failure rates in the UK up by 8.5% in the first quarter of 2008.

Bad debt protection acts as a safeguard against unpaid invoices.

In the event of a customer being unable to pay up, the business with bad debt protection still gets paid.

Bibby Financial Services regional spokesman Dave Golding said: "So often, companies are scared to address the problem of late payment and unpaid invoices in case it jeopardises the supplier-customer relationship.

"As a result, many are in a perilous position with nearly half (47%) having no provisions in place should an unexpected bad debt arise.

"It is, therefore, really encouraging to see that the take-up of bad debt protection has been much higher in the first two quarters of the year."
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Title Annotation:Business
Publication:Liverpool Echo (Liverpool, England)
Date:Jul 28, 2008
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