The POWA lies with Credit Insurance
A company that David Cameron once described as one of Britain's brightest tech start-ups has gone into administration. The company, POWA, was valued at over US$1billion (�694m) before it was to be floated on a Stock Exchange in 2015 and you would be forgiven to think that you would not have to worry about their ability to pay their bills as when they fell due and certainly that they were not prime candidates to go into administration - the too big to fail concept.
As recently as December 2015 their flamboyant CEO briefed the press on the potential of huge new contracts emanating from China that could generate $5bn (�3.3bn) in revenues over three years for the joint venture. Only this January he was paying tribute to David Bowie with a bizarre homage to Ziggy Stardust whilst his company was apparently foundering.
The Administrators have not yet reported on the final financial situation of POWA but it can be imagined that companies without having the security of credit insurance would have incurred some serious losses.
So what is credit insurance? A credit insurance policy would pay out 90% of the value of your outstanding balance with the buyer that becomes insolvent, as long as you hold a valid credit limit under your trade credit insurance policy. Based on some credit reference agencies from 21-Dec-2014 to 06-Jul-2015 POWA Technologies had a recommended credit limit of �1.5 million so companies could have a very high exposure indeed. Assuming credit insurers were carrying exposure, they will be paying claims against POWA to their polcyholders, showing the value of business credit insurance yet again.
The effect of not having credit insurance cover can cause stress on the balance of sheet of suppliers and create a domino effect of others going into administration due to non-payment of invoices. Credit insurance give peace of mind knowing you are protected by your credit insurer. Get a Quick Quote now.