When a growing firm of plastering specialists was hit by a significant bad debt, Lloyds TSB Commercial Finance's Debtor Insurance policy ensured its impact was minimalised.
Established in 1998 by Managing Director Ray Blackeby, The Paramount Finishing Company is a London-headquartered plastering contractor which services clients across the UK.
The business has worked on a number of prestigious projects including the refurbishment of Windsor Castle and properties owned by the Duke of Westminster's Grosvenor Group.
The company had grown steadily to reach an annual turnover of around £1 million and Ray now employs a team of 15 people.
Once bitten...
Ray was acutely aware of the damage that a bad debt or customer insolvency can have on a firm's operations.
He had previously run a successful plastering firm which was forced out of business by an unpaid £300,000 contract.
Ray said: "Having already experienced a major bad debt I've seen first hand how it can quickly undo all of the hard work you put in building up a company.
"I was determined not to let it happen again and so I started looking at insurance policies which would protect my sales ledger."
Ray selected Commercial Finance's Debtor Insurance based on the product's competitive pricing and service levels provided by Lloyds TSB.
Payout protection
Within months of taking out the policy a customer became insolvent, leaving a significant outstanding debt to The Paramount Finishing Company.
Ray continues: "To write off the amount owed would have seriously affected our cash flow and ability to take on new work.
"The Debtor Insurance policy ensured that the business was largely unaffected by the debt and having the policy in place gives me invaluable piece of mind that my firm is protected."
Martin Walmsley, Head of Debtor Insurance at Lloyds TSB Commercial Finance, said: "The current economic climate means that businesses are now more than ever at risk of suffering from insolvencies within their customer base.
"Ray had the foresight to ensure his company was insured and this decision was quickly justified when the policy paid out and protected his firm from the worst effects of this bad debt.
"Being safe in the knowledge that their sales ledger is secure gives many owner managers the confidence to focus on securing new contracts and continue growing their business."
Lloyds TSB Commercial Finance is part of the Lloyds Banking Group.
Debtor Insurance is provided by Lloyds TSB Commercial Finance Limited and underwritten by Chartis Insurance UK Limited.