Business turnround experts have accused credit insurers of withdrawing cover from scores of UK suppliers indiscriminately, making it “doubly difficult” for businesses to be saved at a time of deepening recession. The comments highlight the tension emerging between the financial sector and the business community as credit insurers weigh up the risks of maintaining cover amid a deteriorating economic outlook. The Institute for Turnaround, whose members include Britain’s top experts in the field, says it has evidence of credit insurers withdrawing cover based on their assessment of entire sectors, without considering the health of individual companies. Credit insurers provide insurance to suppliers for standard periods of up to 90 days. Weakening demand has made it harder for companies to maintain adequate cash flow to run their businesses – also known as working capital – and are paying suppliers later.

This entry was posted by Gwen Robinson on Monday, November 17th, 2008 at 5:28 and is filed under Capital markets. Edit this entry.