1. Speaker Steve Sadler FCII Director – Rees Astley SURVIVAL GUIDE TO RECESSION OR ECONOMIC DOWNTURN

2. Should I insure against non payment of invoices? FACTS:Did you know that… 5% of UK businesses fail due to bad debt? On average, debtors make up 40% of a company’s current assets and are almost always uninsured? 63% of businesses never check their customer’s creditworthiness and that 25% never even confirm their terms of business in writing? 68% of businesses have experienced customer insolvency? 25% of business failures come from customers with previously good payment records? British businesses spend over £12 billion a year on credit management and chasing their debts? Every pound lost in bad debt, or spent in trying to recover it, adds thousands to your costs and could even delay your retirement?

3. If your business was to go bust, would you … Lose your job? Have to sell your house to pay the business' debts? Be forced into personal bankruptcy? Be disqualified as a director due to your own inaction? Find yourself facing fines or even imprisonment?

4. CREDIT INSURANCE Buyer risks - Losses due to insolvency or protracted default Political risks (for certain export markets) – Losses arising from moratoriums on payment, exchange transfer delays, frustration of the contract due to acts of a foreign government, public buyer default or force majeure termination of the contract What is covered?

5. What is excluded? Disputed amounts Contractual failure by the Insured Sales to associate and/or subsidiary companies Cash sales and VAT Sales to customers declined by the Insurer Goods sold or services provided beyond the Maximum Extension Period Failure to obtain an import or export licence

6. Other facts to be aware of… Premium - Typically a fixed amount paid in monthly or quarterly instalments Credit Limits - must be established on every customer Insured Percentage - typically 90% Excess – typically £1,000 Notification - the account remains outstanding beyond the Maximum Extension Period Claims - Typically insurers will pay a claim in respect of Insolvency within 30 days of receipt of the fully completed claim, or for Default within 3 months of the date of default, or receipt of the fully completed claim, whichever is the later

7. CREDIT INSURANCE How it helps you grow your business Assess the buyer - identify good or bad customers This allows you to focus your sales efforts on customers that can pay! Debt collection – reduced or removed Preventative credit checking and the collection services provided by insurers reduce this burden Cover - protect cash flow and balance sheet Credit Insurance does both Collateral - improve borrowing A secured asset is more valuable than an unsecured one. Covering against the risk of bad debt makes the business more attractive to banks and financiers