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Debt Collection News Roundup – September, 2016

The team at Access Credit Management is committed to keeping up to date with what’s going on the international debt collection industry so that we can provide our readers with interesting and relevant news about the sector.  As such, once a month we publish a News Roundup to help keep you up to speed with all the important happenings in the industry and provide you with a valuable resource that that you can use to stay fully informed of all the latest news.  It would be interesting to know what you, the readers, think of the stories that feature here.  Please join in by adding your comments below the regular news roundup postings or email us if you come across anything that you think we should include.

First up is the worrying news that a massive 40% of small businesses here in the UK had to write off debts in the last financial year because they don’t actually know how much money they are owed.  A survey of more than 700 companies carried out by Direct Line for Business revealed that 82% of small companies still have balances outstanding from their debtors, with the average firm being owed more than £62,000.  UK businesses wrote off a combined £5.8 billion last year, equalling more than £21,000 per day.  The reasons that the debts were written off included:

  • Suppliers becoming insolvent and unable to pay (29%)
  • Suppliers having insufficient funds to pay debt (17%)
  • Company not having the time or funds necessary to chase the debt (11%)
  • Reluctance to damage future relationship with a customer (10%)
  • Not understanding how to go about reclaiming the payment owed (3%).

Meanwhile, in a move that’s predicted to drive down borrowing costs, the Bank of England is about to start buying up Apple’s debts.  California tech giant Apple is the most valuable publicly traded company on the planet and in August of this year, Apple was ordered by the European Commission to pay £11 billion in back taxes to Ireland.  The move is part of the Bank of England’s attempt to stimulate the economy and it’s published a list of 100 companies (including Apple) whose debts it will begin to hoover up with £10 billion sterling.  It’s hoped that this initiative will reduce companies borrowing costs, encouraging them to borrow more in the hope that this will kick-start investment and boost the wider economy which is in the doldrums following the summer’s Brexit vote.

When it comes to one of the oldest industries in the history of the world, farming, debt and higher prices are reportedly pushing more farmers into selling their land.  Farmers Weekly has reported that with low commodity prices increasing debt and early retirement, there are record numbers of farmers, especially those who have no successors to take over their land, into selling up and leaving the farming life altogether.  While 40% of farmers cited retirement as their main reason for selling, a worrying 30% blamed debt as their reason for selling up.  High land values, combined with low commodity returns have left many farmers thinking about consolidating their assets and experts predict that although farming will continue, it’s likely to become a much more consolidated industry with sharp reduction in the number of active farmers.