Phones 4U Ltd
History has shown that many companies of considerable financial strength have collapsed without any warning. The list is long and includes the likes of Barings, Woolworths, MG Rover and Comet. These companies have one thing in common - people felt that they were institutions that would be here for a long time and that businesses were comfortable in giving them credit to quite a high level and often for a long period.
The other worrying aspect is that many of these suppliers to Phones 4U who are now creditors may well have overdrafts or factoring facilities where the monies due from Phones 4U were the security for the advance.
What can be learned and how can businesses protect themselves from such a potential disaster. Factoring and Invoice Finance companies offer credit protection whereby an insurance company will insure against bad debts. Such insurance is only given against credit worthy companies and insurance cover would be granted to a company like Phone 4U who had a credit rating according to Creditsafe of £7.75 million in October 2013.
Findmeafactor can guide you through this process of both financing your working capital needs as well as protecting your business against major bad debts