As any SME owner can tell you, there’s only one thing worse than an outstanding invoice. No, it’s not two outstanding invoices – very funny. It’s an outstanding invoice from a client that has gone bust. Why? Because it’s unlikely it’ll ever get paid. Take the example of Thomas Cook, which collapsed last month owing millions to hotel groups, high street landlords and scores of suppliers. Many of these organisations now find themselves on the brink because they can’t absorb their losses.
Unfortunately, across the UK bankruptcies are on the rise. According to the Insolvency Service, there were 17,454 corporate failures in 2018 alone. It has been estimated that at any given time, SMEs in the UK are waiting on billions in late payments – so the risks are clear. But thankfully, in this digital age there are ways to protect yourself should a client get into difficulty.
If you haven’t heard of Nimbla, we’re only too delighted to make the introduction. Based in London, they use expert risk modelling tools to insure your business invoices against non-payment in the event of insolvency. Once you sign up through the Starling Marketplace, you have instant access to their free credit-checker tool, allowing you to better assess the financial risks of working with new business partners.
You then have the option to insure either single of multiple invoices, depending on your business needs. So, should your worst nightmare come true and a trusted client goes bankrupt, leaving behind a potentially catastrophic unpaid debt, all insured invoices will be paid out, up to 90% of their value.
This is exactly the position that a small London-based fashion designer found itself in. When luxury high street retailer LK Bennett went into administration in March 2019, the company was staring at a more than £30,000 loss. However, because it had the foresight to insure its invoice with Nimbla it was able to recoup 90% of the money owed.
Flemming Bengtsen, Nimbla’s CEO, believes passionately in providing businesses with the tools to help them grow. “Hard-working SMEs deserve access to affordable, fast and flexible protection that will help them expand into new and existing markets, secure invoice funding and safeguard against insolvent customers,” he explains.
Flexibility is the operative word. Unlike traditional insurance models, Nimbla’s cover adapts to fit your business — whether it’s a one-off invoice or multiple transactions. As it expands, Nimbla is planning to add more innovative products to its portfolio and help transform the UK insurance industry for the better.
Anne Boden, Starling’s chief executive, is a long-standing admirer of the platform. “Nimbla is a great example of a business that is disrupting an old industry model to create products that are relevant to the way we do business today. They’re an excellent addition to our Marketplace that I’m proud to welcome into the fold.”
Seek out Nimbla in the Starling Marketplace. It also integrates with accounting software Xero and FreeAgent, both of which are also Marketplace partners, providing further testament to the power of Open Banking. At this point in time, Nimbla is only available for UK-registered businesses, for example UK-registered limited companies.