FXE Technologies calls for lenders to protect commercial lending portfolios from ‘jingle mail’
FXE Technologies, the multi-award-winning technology arm of Funding Xchange that provides a suite of digital SME lending solutions to banks, brokers and lenders, is warning about a rising trend that echoes the ‘jingle mail’ phenomenon of the past housing market crash. Back then, homeowners, unable to bear the burden of negative equity, would return their house keys to mortgage companies, often without any prior missed payments.
FXE is reporting that commercial lenders are noticing a similar pattern. Katrin Herrling, CEO of FXE Technologies, commented: “We are seeing a rise in businesses that are abruptly closing their doors and halting payments on finance arrangements, often without significant warning signs. The contemporary version of ‘jingle mail’ doesn’t involve house keys, but rather a JCB left locked in the yard.”
What started as anecdotes now appears to be backed up by recent ‘voluntary insolvencies’ numbers published by HM Government’s Insolvency Service on August 15th. The data shows twice the level of voluntary insolvencies compared to pre-Covid times.
Speculating on the causes, Katrin points at two potential factors: ‘Business owners maybe simply exhausted from weathering the storms of Brexit, Covid, Ukraine, and soaring inflation. We can also see from our data that the ‘Covid Cash Pile’ is for many businesses turning into a mountain of liabilities that must be repaid.”
Katrin Herrling emphasises that this creates a need for lenders to understand changes in their portfolios: “FXE’s Portfolio Monitoring solution can help lenders detect subtle signs such as dwindling cash balances, third-party arrears or failed payments, enabling real-time, data-driven portfolio management strategies. This empowers lenders to concentrate their support where it can truly make a difference – for both businesses and their own balance sheets.”
