Quick Recovery from Affluent Café

Within 24 hours of instruction, Advocate recovered £9.3K from a small London chain of artisanal cafes. The client is an Essex based heating, ventilation and air conditioning (HVAC) contractor with a nationwide footprint. Unlike a lot of HVAC firms, our client has an eye for aesthetics. They appreciate bulky exhaust boxes and intrusive ugly ducting have no place in high-end establishments or luxury environments. With high energy prices, efficiency is also a prerequisite for their customers.

Heating Up

The debtor company has been trading for 7 years and during that time has opened 4 branches in the more affluent areas of London. Establishing a business within an already crowded market, in one of the world’s most consumer-driven cities was never going to be easy. Gaining a reputation for quality was the priority, closely followed by retrofitting the outlets to mirror the standard of products offered. Our client was a good fit for this vision and was contracted to instal an HVAC system for the basement dining area, ground floor kitchen and guest welcoming area. Payment was to be made over 3 instalments at different stages of the build. The first invoice was issued a month before the first national lockdown of 2020. Our client made substantial initial progress and was ahead of schedule when pandemic restrictions were brought in. A combination of mandated business closures, and the debtor not having sufficient funds to continue meant the final invoice was raised on completion 18 months later.

Cooling Down

As local and commuter trade returned, the taps of revenue opened and the newly installed HVAC system received high praise from staff. Having thanked the client for a job well done the debtor wished to withhold payment claiming the job had not been completed. Their confusion was understandable to a degree, having lost track of our client’s progress with the mandatory business interruptions. Having offered a token discount as goodwill, payment was not forthcoming, and the chase went cold.

Venting Payment

At the time of Advocate’s instruction, the oldest invoice was 580 days overdue and the debt stood at £9.3K. It took us less than 24 hours from instruction to recover full payment of the principal amount. Because the debtor had a relatively good credit rating and the debt was below the temporary £10K winding up petition threshold, a Notice of Court Proceedings was issued. Businesses are now more aware of credit risk and credit ratings than in any other previous decade. The stain of a County Court Judgment can be sufficient for suppliers to refuse a sale and deter lenders from extending credit. Some businesses have taken the approach of stockpiling cash to only pay creditors at the 11th hour. Based on this debtor’s behaviour and the prompt transfer of £9.3K plus statutory late payment charges, you could be forgiven for thinking they were taking the same approach. At Advocate, we are seeing an increasing number of debtors behave in this way. If your debtor is withholding payment for seemingly no rational reason, get in touch with us to see how we can help you get paid quickly.