Business Owners Unaware of Business Partner Debts
The results of a survey published by online directory 192.com suggest that one in three business owners were unaware of their business partner’s debt, while roughly the same number admitted they had been lied to about the state of a business partner’s debt.
More than 20% of respondents said they had found themselves caught up in “financially unsound business relationships” after failing to study company credit reports. More than three-quarters (77%) neglected to research a business partner’s financial history by obtaining a business credit report. Such reports detail a businesses’ financial health and history by outlining county court judgments, which stay on the register for six years.
Dominic Blackburn of 192.com said:
"We advise businesses to use a company credit report to find out whether a potential business partner can service its debts, pay its suppliers on time and maintain stability at board level."
Outstanding charges against a company were cited as the most troubling aspect of a company credit report, followed by previous county court judgments and poor working capital.
Just under half of respondents also said that a company who had changed its name several times would also be a cause for concern, while the unreliability of business suppliers had also been a problem for SMEs.