Dating for debtors
But since these companies also tend to be in the business of selling financial data on solvency, I took this promise with a major pinch of salt.
We were lucky: our suppliers needed us more than we needed them.
At times, certain industries are almost abandoned by the credit insurers, because of widespread insolvencies.
This has happened in the IT reseller market, where only one underwriter has a dominant share.
But the credit insurer suggested some of our suppliers had their debts insured, and so if we wanted to continue to use them we needed to reveal our innermost financial secrets.
A while ago I undertook a buyout, and the previously ungeared target company took on a fair amount of debt.
Perhaps a trade association should be established, or a cross industry forum.
There are frequent complaints about the behaviour of the banks towards companies in difficulties.
Unilaterally, the trade credit insurers pulled their support, and suddenly all the suppliers demanded cash on delivery. Receivers were duly appointed, even though the company was still making a small profit.
No explanation was given for the decision to black-list the business.