Coronavirus business news update 7th April 2020.

7th April 2020.

James Salmon, Operations Director.

During the Coronavirus outbreak we will continue to share (as we can) the business news stories we have seen that we think will affect our members and readers. The news stories you might have missed that might have an impact on SMEs and those that sell on credit.

Construction Sector Output

UK Construction Sector Output plunged at the fastest rate since the financial crisis in March as coronavirus containment measures shut down sites and caused new orders to slump.

The construction purchasing managers’ index (PMI) tumbled to 39.3 in March from 52.6 in February. This was the lowest since April 2009. A score of below 50 on the gauge, which measures the health of the sector, indicates contraction.

Andrew Wishart, UK economist at consultancy Capital Economics, observed that: “The PMI is pretty much guaranteed to deteriorate further in April as the full effect of the lockdown is captured,” having earlier predicted a 15% contraction in gross domestic product in the second quarter.

Meanwhile, consumer confidence in the UK fell from minus 7 in February to minus 34 at the end of March, according to GfK, just shy of the index’s record low of minus 39 in July 2008.


Privacy concerns have been raised over video conferencing software Zoom with companies, governments and organisations linning up to announce they have banned the use of software over fears calls could be intercepted. Their CEO Eric Yuan has apologised for not building  end to end encryption into the software from the start and insists the platform will put “privacy and security first”

Zoom’s founder and CEO has admitted his company made “missteps” that should have been fixed before the service became so popular during the coronavirus pandemic.

Eric Yuan told CNN that the company had “moved too fast” and should have done more to enforce password and meeting room security.

Recent reports have suggested that Zoom is now more popular in the US than Microsoft Teams, with its user base surging from 10 million to 200 million in recent weeks.

BBB blamed for delays to small business loans

The British Business Bank (BBB) has come under fire from high street banks which say the Treasury-appointed body responsible for overseeing the coronavirus loans scheme is applying over-complex rules for loans, leading to a logjam.

Banks have to book loans with the BBB but they say the process is too detailed and should be simplified with the business bank given audit rights to assess the loans once they’re paid out.

Separately, Staff at Lloyds bank have told trade union BTU that they are putting in 18-hour days in an effort to deal with demand from small business owners desperately trying to save their enterprises.

Ministers eye rescue package for start-up industry

The Treasury is considering how to support start-ups as venture capital backers warn many are not eligible for the government-backed loan scheme because they are loss-making.

Global markets cheered as virus spread slows

Signs that death rates from COVID-19 were stabilising in Italy, Spain, France and New York state helped rally global markets yesterday.

Analysts at Capital Economics said: “While it is too soon to know for sure if the pandemic has reached an inflection point, this is encouraging.

We have argued that stock markets will experience a sustained rebound only when the spread of the virus slows around the world.”

Credit Services Association warn of perils of ‘writing off billions’

The Credit Servcies Association (CSA), the trade body for the debt collection industry has issued a detailed response to the Government following calls from a number of debt charities to halt all collection activities.

The CSA says the industry returns around £4 billion to the UK economy every year – the equivalent of building five new hospitals. Some £400 million of this is given to small businesses.

A halt to debt collection would potentially write off billions of pounds of debt, it points out, urging a collaborative approach by coming up with policies that deal with a specific and clearly defined problem without causing additional issues that it argues make matters worse.

Debt charities have urged the chancellor to write off £10bn worth of outstanding council tax and social security debts and consider a “debt freeze” for people struggling to manage on low incomes.

Many of them were signatories to a letter to Rishi Sunak signed warning that millions of low-income households face a “deepening debt trap” that will be impossible to climb out of without government intervention.

“Those facing redundancy, loss of wages or other payment difficulties because of Covid-19 must be entitled to an immediate freeze on unsecured debt payments, similar to the mortgage holiday extended to homeowners, with no interest accumulated during the repayment holiday,” they said.

But Peter Wallwork, CSA Chief Executive, said: “Now is the time for clear heads and clear thinking. We need to resist calls for wholesale changes which may look like the answer but fail to take into account the bigger picture and the wider impact on society and our economy. We need to help the greatest number we can but in such a way that doesn’t damage the credit/customer ecosystem irrevocably.”

CSA members act on behalf of nearly all of the major financial institutions, banks, credit card companies and the Government. But its members also manage more than 750,000 commercial accounts, mostly on behalf of small businesses.

Mr Wallwork says the danger is that lines are becoming blurred: “When organisations call for a halt to collections or even writing debts off altogether, they will be doing untold damage to our country’s small business community, many of whom are already under pressure to survive.

“With estimates that as many as 800,000 may fail in the next four weeks, this is not the time to prevent them from recovering cash owed to them on the grounds of some spurious moral reasoning.

“While calls for further action from Government are understandable, and outwardly show compassion, it is imperative that the full consequences of any such action are properly understood.”

He says he has already written to all 250 CSA members to urge them to show additional forbearance where it is needed and has been delighted with the way the industry has responded.

“Many of our members had already taken proactive action to support their customers so it wasn’t a case of us telling them what to do but more them telling us what they’d already done,” he said.

Debenhams appoints administrators ‘to avoid legal action’

Debenhams has appointed Geoff Rowley and Alastair Massey of FRP Advisory as administrators, with the chain describing the move as a “necessary step” to protect it from the threat of legal action which could see the firm pushed into liquidation.

It is feared that suppliers could resort to suing the chain, which has hundreds of millions of pounds of inventory that it no longer needs on order.

Julie Palmer, a partner at the insolvency firm Begbies Traynor, commented: “Debenhams has been in financial difficulties for a while so this doesn’t come as a major surprise. But it will leave its 20,000-plus strong workforce in a precarious position who will struggle to get new employment during the ongoing uncertainty.”

P&O Ferries close to collapse

The owner of P&O Ferries is attempting to secure a bailout deal with the UK government as the company struggles to stay afloat.

Dubai-based DP World is willing to put fresh capital into the business but ministers are said to be reluctant to contribute £150m from taxpayers.

New car sales for March down 44%

The Society of Motor Manufacturers and Traders has announced that new car sales were down 44% last month, with 255,000 vehicles sold in the UK in March compared with 458,000 12 months earlier.

Mike Hawes, chief executive of the trade group, commented: “With the country locked down in crisis mode for a large part of March, this decline will come as no surprise,” continuing: “This is a stark realisation of what happens when economies grind to a halt. How long the market remains stalled is uncertain, but it will reopen and the products will be there.”

Do you sell on credit?

With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.

Those customers will look for the easiest option  to boost their cash-flow. Don’t let it be you.

You can’t just assume your customers can and will pay you eventually, no matter how big their name is.

It is essential to have credit management systems in place to monitor and check your customers credit worthiness.

It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.

About CPA

The Credit Protection Association can help!

Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.

At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.

We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.

Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply on credit, help us help you identify the risks.

Why use a third party collector?

As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When your customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.

Over the years we have collected billions in overdue invoices for our customers.

Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.

You might be hesitant about contacting a debt collection agency. What are they going to be like?

Can they help your particular type of business?

There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.

Debt collection agencies are not all alike.

Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and  has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!

At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.

The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.

We are polite, firm and efficient when it comes to recovering outstanding debt.

“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has  helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire

“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections


Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

CPA is passionate about late payment

The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.

We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.

If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.

As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.

Under little used legislation, you are entitled to compensation for those late payments.

Now you can boost your own cash-flow.

CPA can help unearth the those hidden treasures.

We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.

Yes, CPA can help you boost your business cash-flow.

Don’t let your bankers control you, contact CPA today.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

The “Why” of the late payment culture.

New PM should walk the walk and back small firms over late payments

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

Do you realise you could be sitting on a fortune?

Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.

If you sold B2B on credit then there may be a hidden source of capital you can call on.

If you fancy an bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.

Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.

We can help you uncover the pile of gold, you didn’t even know you were sitting on.

If you trade with other businesses and were often paid late then you could be entitled to significant compensation.

Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.

Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.

You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.

That compensation could provide the cash boost your business needed.

But don’t delay, that compensation evaporates if not claimed within six years of the late payment.

How can CPA help?

CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.

We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.

Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.

CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.

The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit.  You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.

We do the work, you receive the cash.

If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.

We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.

We are helping business owners  who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.

Those former clients who regularly paid you late can finally be made to pay.

Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

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Read our Cash Flow Advice

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Read our blog – What is credit management?

Read our blog – How to select a debt collection agency

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see our blog – 15 steps to avoid invoice fraud

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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections