Based on an analysis of over 15 million UK companies, the Association of Chartered Certified Accountants, the Chartered Institute of Purchasing and Supply, the Institute of Credit Management together with Taulia, uncovered truths of the economic downturn and pivotal steps to securing the UK recovery and bridging the ever growing trade credit gap.

The UK is entering the economic recovery burdened by an unprecedented £75billion trade credit gap.

And it’s only getting bigger.

If we don’t take action to reduce the trade credit gap, we run the major risk of putting thousands of companies out of business. Secure the economic recovery. Take action today and sign the Trade Credit Pledge.

Take the Pledge

What is Trade Credit and
Why Does it Matter?

trade-credit

Trade credit is the granting of credit by non‑financial firms to their customers. Trade credit exceeds bank credit by 20%, currently sitting in excess of £327 billion.

For the majority of smaller businesses, trade credit is their only source of finance, making up 90% of their total borrowings. Trade credit makes up a significant portion of larger businesses as well, coming in at around 20% of total borrowings.

If we don’t take action to more effectively manage trade credit, the UK may lose its brightest young businesses to a cash‑flow crisis.

Take the Pledge

What Can We Do to Manage the
Trade Credit Gap?

In the comprehensive academic study, Trade Credit in the UK Economy (1998-2012), Professor Nick Wilson of the Credit Management Research Centre found:

Companies must use trade finance as working capital to fund day‑to‑day operations. Bank finance should be used for long-term planning.
Companies should undergo a Trade Credit Tune‑Up or they run the risk of overtrading and running out of cash as the recovery takes hold.
Companies must understand the benefits of paying suppliers faster. Just 5 days faster would release £29 billion in working capital.

How Can I Take Action Right Now?

  1. Sign the Trade Credit Pledge. You'll receive a copy of the full academic report and an executive summary produced by Taulia, Charting the Trade Credit Divide. The Trade Credit Improvement Toolkit, which will include guidance notes, checklists, trade credit calculators and other simple to use tools, will be released shortly.
  2. We can’t do this alone. Share the pledge and ask your customers and suppliers to take the Trade Credit Pledge.

Pledge Now to Secure the Recovery

The Trade Credit Improvement Consortium

The Trade Credit Improvement Toolkit and Trade Credit in the UK Economy (1998-2012) full report is brought to you by The Trade Credit Improvement Consortium, including: the Association of Chartered Certified Accountants, the Chartered Institute of Purchasing and Supply, the Institute of Credit Management and Taulia.