Bad debt warning to VARs

Online credit checking firm e-bcm warns that the growing level of bad debt in the UK could cause more channel firms to go under

The UK’s growing bad debt culture could spark a rise in the number of small resellers going under in 2007, according to online credit checking firm e-Business Credit Manager (e-bcm).

The company, which was founded late last year (CRN, 4 December), believes firms with one to 20 employees are most at risk as they are more likely to lack the resources to reduce debt risk and chase up outstanding payments.

According to recent research by Vanson Bourne, 56 per cent of firms with less than 20 staff suffer from late payments. The equivalent figure for companies with between 20 and 50 employees is just 29 per cent.

And with business costs and inflation still rising, e-bcm is convinced the problem could “deepen” in 2007.

“The smaller the business the less likely it is they will have time to carry out credit checks or chase up debts and we believe that with rising costs and inflationary pressures putting the squeeze on businesses, this year could see many more smaller businesses getting into trouble due to bad or late payers,” said e-bcm’s commercial director Dennis Scott.

Established in December by Scott and fellow channel veteran John Carter, e-bcm offers an end-to-end financial support service it claims addresses the problem head-on.

The package, available from £2.49 a month, allows small firms to run credit checks on potential customers and generate formal requests for payment letters, according to the firm.

“The e-bcm service makes it quick, easy and affordable for even the smallest business to run checks on new customers and chase up outstanding debts,” commented Scott.