With interest rates projected to increase over the next three years, this may well have an effect on the level of your debts and recovery of the same.
Surveys suggests that the majority of homeowners will be left struggling financially as the interest rate increases. With interest rates being so low over the course of the last 5 years, homeowners have had a financial cushion to buffer the impact of inflation. However, that is set to change. As a consequence, you may find that there is an extended delay in payment and/or your clients are seeking extended credit terms. You should carefully consider the impact that such changes are likely to have on your business and have a stringent credit control policy in place.
Conversely, subject to your terms of business, increased interest rates may entitle you to greater recovery of interest on late payment of your invoices. In the event that your terms of business refer to the base rate and/or entitle you to rely on the Late Payment of Commercial Debts (Interest) Act 1998, you will in due course benefit from the increased rate of interest.
We would be happy to consider your payment terms (including recovery of interest provisions) and credit control policy in order to maximise your recovery. Please contact Akanshi Agrawal for further information.