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Credit management focus: Credit circles


Does your business benefit from participation in a credit circle?

Have you ever considered tapping into this resource? If not, you’re in the majority but potentially missing a trick when it comes to safeguarding your business against late payment.

According to our Late Payment Survey, only 11% of businesses currently belong to a credit circle.

However this figure rises as high as 35% amongst companies who turn over more than £3 million.

So how can they help? Essentially they are a means for businesses to share important creditor trends with fellow companies – typically other members of a trade association – in order to access instant information on the creditworthiness of customers both existing and new.

Members belonging to credit circles tend to meet regularly to share their experiences, but commonly post information online in the interim so that any unusual and instant changes to a customer’s payment habits can be taken into account when making credit decisions.

In a climate where the financial health of businesses can change overnight, this can be a highly useful resource and complementary to the use of credit reports.

While credit reports provide information such as whether a business has County Court Judgments filed against them, they don’t always provide up-to-the-minute information or anecdotal details.

Yet they are proving far more popular, according to the survey, with 48% credit checking new customers and 29% regularly checking existing customers.

Which credit management tactics does your business prefer? Do you think credit circles have a place in your industry?


Just some of our clients

  • Smith & Williamson
  • Custom Glass
  • Royal Bank of Scotland
  • Harrisons Business Recovery
  • Wupwoo
  • Kreston Reeves
  • Santander Corporate & Commercial
  • Quantuma
  • Construction Recruitment Services
  • Eazipay
  • BNP Paribas
  • Midland Rock
  • Wote Street People
  • Leumi ABL
  • PNC Business Credit
  • Mazars
  • Close Brothers Invoice Finance
  • Leonard Curtis
  • SER Contractor
  • Barclays
  • Duff & Phelps
  • FRP Advisory

Authorised and Regulated by the Financial Conduct Authority

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