Home > Uncategorized > Clueless credit ratings part 2

Clueless credit ratings part 2

Credit management is vital to businesses not just as an insurance against bad debts but also as tool to ensure that good business is not turned away. This week I came across an example of a credit insurer without the imagination or foresight to back a very strong prospect

The request was to enable invoice financing for a client and fortunately I quickly found alternatives but the orgininal financier lost a very good piece of business

They lost it because they would not back a newly formed subisdiary of one the UK’s most successful retailers. Genuinely successful rather than simply high profile

The retailer had invested at the very least, £8m in this subsidiary. My client was looking for a modest limit of £40k

As my client rightly pointed out, why on earth is a major business valued in the billions going to let a small new subsidiary go to the wall after just having paid £8m for the business and invested considerably more?

If this credit insurer cannot grasp that then what are they for?

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