The debtor operates from a large warehouse and distribution hub in Bedfordshire and boasts many of the UK’s largest retailers as their clients. Established for over ten years and operating in a niche market, the company and its website give the appearance of a well run expanding and profitable business. If you were running a local business, it’s just the type of customer you would be pleased to receive new work from.
The creditor based in neighbouring Northamptonshire had built up a good reputation since starting the building and roofing company seven years ago. The business has gone from strength to strength, relying on client recommendations to grow the company. Very much a family business, the sole director is assisted in the business by his wife, brother, and a small team of skilled tradesmen.
Companies May Not be as Credit Worthy as they Appear
They received an inquiry regarding fixing a leak to a commercial roof and arranged to carry out a survey and supply a quotation. The survey was conducted within 48 hours, and the issue was quickly identified. A detailed quotation including costings for materials and lift access equipment hire was supplied by email on the afternoon of the survey date. An instruction to carry out the work was received the next morning, and a date to carry out the work was agreed upon.
Upon completion of the work to the customer’s satisfaction, an invoice was issued on 14-day payment terms. The creditor recalls being impressed with the size and scale of the customer’s operation and being sure that there would be no problems in receiving payment. How wrong they were.
And Seven Months Later
By the time Advocate Debt Recovery was instructed, the invoice was seven months overdue, and the creditor had all but given up hope of ever being paid. The debtor had ignored entirely the creditor’s monthly attempts to obtain payment. Statements and letters were sent and ignored. Emails were sent and ignored, and telephone calls to the company were met with contempt.
Our initial investigations into the debtor company’s financial position indicated that the company had a much lower turnover than expected, given the size of the operation. It became clear that the company’s rapid expansion and impressive facilities had been funded by borrowing rather than generating sufficient profits.
The Consequences of a CCJ
A more positive finding was that there were no County Court Judgments registered against the debtor. There was no doubt that their poor attitude to paying suppliers would have inevitably led to many threats of Court action from disgruntled creditors and that this was the point at which they finally paid up. Not surprising, really, a company that depends on borrowing to maintain its business model can I’ll afford to obtain a CCJ that would affect its ability to borrow.
We issued a Notice of Court proceedings and received full payment within 72-hours, including late payment interest and debt recovery costs. The funds were transferred to our client the same day.