The Business Secretary Warns The Finance Houses About Lending To Small Enterprises, But A Small Company Might Need Help To Get An Bill Paid By A Large Company.

Mr Vince Cable, the Business Secretary, has recently stated that banks are “not acting in the national interest”. This is because many of the banks do not tend to be lending to small organisations and some small organisations are failing, maybe because of lack of funding. From the banks side, they state that they have lent out £6.8bn in June this year, but also state that organisations are reluctant to take on business loans when the economic outlook is so uncertain. Mr Cable has targeted dividends and bonuses as spending that could be better used for small organisation business loans and he has talked about a “carrot and stick” approach if the banks do not change.

While this change will be welcomed by small organisations, no doubt, for a small organisation that is waiting for payment of an outstanding account with a large organisation, for projects completed or goods delivered, this could well come too late if they are in need of the account payment. The small organisation would no doubt make contact with the large organisation when the account goes outstanding, to get to know what is happening with their account, and hope to receive an acceptable result. If they don’t get an acceptable result then they could feel that they are being used as a free credit service and then find out about Debt Collection. Their cash flow can easily influence which Debt Collection option they can take, where the typical Debt Collection providers of solicitors and Debt Collection Agencies will charge from 10% to 20% or more of the account value. Taking a DIY approach by using Debt Collection Software can cost around £40 for a decent Debt Collection Software system, but the small organisation will have to allow for the allocation of resources such as people, and time to balance out the lack of expert people that solicitors and Debt Collection Agencies have available for Debt Collection contracts. Money couldbe tight and the Business Secretary could not be able to get the banks to both offer funding and at an affordable price before they get the outstanding account paid, so their best direction could well be Debt Collection Software. A further cost gain of Debt Collection Software is that it is a one off purchase and so can be re-used for any future Debt Collection operations that they have to deal with, whereas solicitors and Debt Collection Agencies will charge their fees every time.

To balance out the lack of experience in Debt Collection, the small organisation will need to pay careful attention to the documentation that is included in the Debt Collection Software, in particular any tuition modules, either as part of the Debt Collection Software itself or online from the makers of the Debt Collection Software, to take them through the Debt Collection operation. They will need particular coaching in how to compose good quality Debt Collection letters since these are at the focal point of the Debt Collection operation. Useful material that should be supplied includes any present laws and any good snippets that Debt Collection Agencies use. The people selected to compose the Debt Collection letters ought to have a good command of English so that the Debt Collection letters won’t have any spelling or grammatical oversights in them when they are sent out as this can harm the Debt Collection operation.

If the small organisation and its people work hard on the Debt Collection Software and compose good quality Debt Collection letters that they must have a good chance of getting the large organisation to pay the outstanding account and for a much cheaper price that solicitors and Debt Collection Agencies would have charged them.