Credit insurance proves essential to business’ growth
Patrico, a company based in Tewkesbury, Gloucestershire, supplies and distributes a range of industrial containers.
The family-run firm was established in 1983 as a quick response, service-based business. It grew rapidly and in 1993 Patrico acquired large freehold premises where they remained until they were devastated by the severe floods of 20th July 2007. The company took the decision to completely rebuild and now have a modern warehouse that will enable them to continue their growth in the coming years.
From this base, Patrico, which employs 21 people and has a £3.9 million turnover, supplies a variety of containers to the paint, adhesive, and chemical industries. Deliveries are made from the depot by Patrico’s fleet of vehicles.
As a result of the floods and an unexpected payment default by one of their long standing, valued customers, the company decided that it had to take steps to secure its future well-being and financial security.
Lloyds TSB Commercial Finance’s role
Patrico approached Lloyds TSB Commercial Finance, the asset based finance division of Lloyds Banking Group, in February 2008 for a solution to protect its cashflow during the turbulent trading conditions.
The business was one of the first firms in the UK to utilise the funder’s debtor insurance policy, which is supplied through its relationship as authorised representative of Chartis Insurance UK.
This facility protects up to 90 per cent of bad debts suffered as a result of non-payment of invoices or customer insolvency. The cash can normally be recovered within 30 days of receiving confirmation of debt.
Since the facility was put in place, Patrico has been protected twice from separate customer non-payments. They also benefit from the customer monitoring service that gives them an insight into the current and future creditworthiness of existing and potential customers which enables them to maintain their strategy for growth.
The result
As a result of the sustained support from Lloyds TSB Commercial Finance, the business is now in a strong position to confidently grow and increase trade.
What the team said
Robert Lanchbury, Managing Director at Patrico, said: “In 2007 we were struck out of the blue by a defaulted payment that coupled with the impact of the floods, made us think hard about the future financial security of our business and prompted us to search for a facility that would safeguard our growth.
“The debtor insurance policy from Lloyds TSB Commercial Finance has provided us with peace of mind over the last three years, ensuring we were left unaffected by similar non-payments from customers.
“We are positive about the future and with the help of debtor insurance; we are in a strong position to trade more assertively, without worrying about late payments.
“A key part of this success is the strong relationship that we have developed with the team at Lloyds TSB Commercial Finance which enables us to get the best out of the service that is offered.”
Lloyds TSB Commercial Finance debtor insurance client manager, Jenny Heath, said: “In the current economic climate, it is prudent for firms to trade by protecting their most valuable asset - cashflow.
“Patrico was one of our first debtor insurance customers after we introduced the product set in 2008, and it is fantastic to see the business still growing and protected from the possibility of customer insolvency, which could have a serious knock-on effect.”