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SMEs face hard slog as judgments rise

By CreditMan Friday, May 31, 2013

The cost of debt judgments faced by businesses in England and Wales jumped by nearly 15 percent last quarter according to Registry Trust’s statistics for the first quarter of 2013.

Registry Trust is the non-profit organisation which collects judgment information throughout the United Kingdom and Ireland. In England and Wales it runs the Register of Judgments Orders and Fines for the Ministry of Justice.

Judgments worth a total value of £128.2m were recorded against businesses in the period to the end of March, £16.4m or 14.7 percent more than the recorded figure for the fourth quarter of 2012. Much of the rise in value is attributed to unincorporated businesses, accounting for £15m of the increase.

Year-on-year, the value of judgments against businesses has fallen by 15.1 percent or £22.8m from £151m in Q1 2012.

The number of judgments issued against all businesses in England and Wales reflects this pattern, falling from 34,680 in Q1 2012 to 28,261 in Q4 2012 and increasing to 29,692 in Q1 2013.

Last quarter Registry Trust received a total of 59,062 search requests in addition to providing the data in bulk to credit reference agencies and others as an indicator in assessing creditworthiness.

Announcing the statistics, Registry Trust chairman, Malcolm Hurlston CBE, said: “There may be several factors at play in the recent jump in judgments against businesses, including the sluggish performance of the economy at the tail end of last year. We shall have to wait until next quarter to see whether a trend emerges or whether this is a temporary blip.

“That the majority of the increase comes from unincorporated businesses shows the continued slog SMEs are facing.

“One way for SMEs to fight back is to ensure they have robust credit checks in place, to increase the likelihood of invoices being paid and therefore maintaining cash flow. Checking for debt judgment histories against your suppliers is a quick and inexpensive way to inform this process.”

Anyone may search for entries against a named person or business at a stated address or a corporate body in Great Britain and Northern Ireland by visiting Registry Trust’s website www.trustonline.org.uk or by writing to Registry Trust, 153-157 Cleveland Street, London W1T 6QW.