Credit history, a help or hindrance to budding entrepreneurs?

Credit history, a help or hindrance to budding entrepreneurs?

In his most recent blog, ICM CEO Philip King pulls into question some of the government MP statements on credit history and entrepreneurship in the SME sector, making some valid points.

Philip’s blog can be read in full here: http://www.icm.org.uk/ceoblog/confused-thinking-blog-philip-king-2/. Crux of his argument seems to pull into question seemingly conflicting views voiced by George Osbourne and other MPs at a recent conference in Manchester. On one hand, a proven history of trying and failing in business, could indicate lessons learned and a safer bet for any funding for the future. Equally, some try and repeatedly fail, never attaining a successful enterprise, leaving creditors reeling in their wake.  Essentially the question brought about is should banks transfer history between them or is this counterproductive to business growth? 

It’s been argued that a Californian idea is that no transfer of information occurs. If a business has a bad credit history with one bank, they simply apply to another bank and are assessed afresh. That perhaps by comparison our credit history system in the UK is thus stalling our own country’s growth and entrepreneurship. Indeed as Philip states in his blog, numerous celebrity entrepreneurs did not succeed first time, many of which now have well documented life stories of how they learned from those past failures to become the success they now are. However the argument that we transfer information if good and bury if bad seems impractical logistically. Who decides how good or bad, and where to draw the line? The main question seems to be how reliable the history is for predicting the future. For which a conclusion might be that no one can truly foresee the future, so why not give business a chance? The reality is the risk of lost capital to investors, and the potential domino effect one unsuccessful enterprise may have on others invested in it, supplying to it, awaiting return from it.

Safe Credit Control is a software product that aims to minimise that risk by reducing debtor days with proactive customer relationship management with creditors. As a software solution, Safe Credit Control engages those who owe early for repayment, rather than awaiting the traditional 60 days before beginning the chasing process. Reducing debtor days can improve cash flow which can be make or break for SMEs. To find out more visit www.safe-creditcontrol.co.uk, email info@safecomputing.co.uk or call 0844 583 2134. 

Bookmark and Share

Comments

No comments have been added yet.

Your name:
Comment:
 Can't read it? Try another

enter the characters above into this box:


This post has been viewed 6445 times.
Safe Computing on Twitter
Monthly Archives