Credit Insurance gives you the POWA to go from 0 to 90!
Further to our blog about POWA Technologies, we have learnt what Deloitte, the appointed administrators were able to extract from the company for the unsecured creditors…nothing! Following the administrator's report POWA only had £277k in their bank meaning the likelihood of being able to pay their unsecured creditors a dividend would be extremely low after paying staff, rent, overheads and the administrator.
Mr Wagner, the founder of POWA, compared his company to that of the company that built the Channel Tunnel as that company was pre-revenue for many years and if POWA had been given time they would have eventually become profitable. Their largest funder Wellington disagreed and called the administrators in. They had accrued rent of £2 Million for their office in Heron Tower and were paying staff an average of £89,000 a year. The high average could be distorted by a few high earners but either way this is very generous for a start-up company that was not making enough money to cover these costs.
There is a total of £15 Million owed to suppliers and if those suppliers did not have a trade credit insurance policy then they will have to wait to see if the administrator offers a dividend, which is extremely doubtful. However if the suppliers are protected with a credit insurance policy, then the credit insurers would being paying out claims at 90% of the amount owed to them. Credit reference agencies were suggesting a positive credit limit for a time, meaning suppliers with credit insurance policies would have had debt covered by credit insurers.
Suppliers with credit insurance can truly go from 0% to 90% thanks to credit insurance companies. As trade credit insurance pays out when a company goes into administration/liquidation meaning companies would not have to wait to find out what dividend, if any, is decided by the administrator. Credit insurance is a great way of protecting yourself from huge losses that could seriously affect your business. Get your business credit insurance quote here.