New finance provider seeks to acquire £1bn+ in overdue invoices
New finance provider Azzurro Associates, is looking to provide cash against at least £1bn of UK businesses’ unpaid invoices to help provide much needed liquidity in the coronavirus crisis.
Azzurro Associates is establishing a unique service to help businesses clear their growing unpaid debts. This is the first time that companies operating in the B2B sector have been able to obtain cash against their overdue debts. They have previously been forced to choose between writing off bad debts, or taking costly and time-consuming legal action themselves.
Azzurro says it is interested in providing cash to UK businesses having unpaid invoices with a total of £50,000 – £10m. In addition to the upfront cash, Azzurro will share collections it achieves on the unpaid invoices with businesses, further improving their return on the unpaid invoices.
The coronavirus lockdown of the economy has seen the problem of unpaid invoices begin to spiral out of control. Many larger businesses are choosing not to pay smaller suppliers in order to preserve their own cash – creating a shock to cashflow that is now rippling across the economy.
Commenting on the launch of Azzurro’s initiative, Philip King, the interim small business commissioner, says:
“The whole global business community needs to pull together to fight Covid-19, and not damage the supply chain by delaying or refusing payment to small suppliers. It is very difficult for small businesses in the current climate and yet they are central to our economy.”
“As the interim small business commissioner, I’m doing everything I can to make payment prompt and to support small businesses generate the cash flow that is so critical. At times like this, we need creative ideas and I’m delighted to see so many organisations like Azzurro introduce different and innovative solutions.”
While invoice finance providers will fund in-date invoices, only Azzurro provides cash for overdue and written-off invoices that businesses are struggling to collect. This can provide immediate liquidity for businesses struggling with mounting bad debts.
Azzurro says that as the government’s Coronavirus Business Interruption Loans (CBIL) scheme takes time to get off the ground, businesses with £50,000 or more of unpaid commercial (B2B) debts could quickly improve their cashflow by obtaining cash through this new service.
Andrew Birkwood, CEO of Azzurro Associates, says: “There has never been a more important time for businesses to be able to extract value from their unpaid debts. As coronavirus leads to more businesses failing to pay their suppliers, businesses further up the supply chain need to make sure they don’t run into liquidity problems.”
“Faced with months of costly legal action to achieve payment of an invoice, most businesses simply accept bad debts and write them off. There is now a better option.”
“We’re looking to provide a vital source of liquidity for British businesses. Generating immediate cash from bad debts could be the solution for many companies facing a coronavirus cashflow crunch.”
