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Azzurro service pays cash for unpaid invoices to help unlock funding crisis

26 May 2020

LARGER FIRE and security-focused businesses with more than £50,000 of unpaid invoices could benefit from a newly-launched scheme that buys those invoices for cash, turning a potential bad debt write-off into positive cashflow.

New finance provider Azzurro Associates is looking to provide cash against at least £1 billion of UK businesses’ unpaid invoices to help provide much-needed liquidity during and beyond the current COVID-19 crisis.

The business is particularly targeting fire and security firms with between £50,000 and £10 million in unpaid bills for which it will not only provide upfront cash, but also share in the collections it achieves on any outstanding debts.

Azzurro Associates’ new commercial debt solution differs from ‘traditional’ invoice finance in that the former advances cash against invoices that are still within term (ie 30 days), whereas Azzurro provides cash for debts that are overdue or delinquent, and that a business is struggling (or has simply failed) to collect.

Andrew Birkwood, CEO of Azzurro Associates, believes this is the first time that companies in the B2B sector have been able to benefit in this way. He told Fire Safety Matters: “As COVID-19 leads to more businesses failing to pay their suppliers, companies somewhat further up the supply chain need to make sure they don’t run out of cash,”

Birkwood added: “When collection activities are exhausted, the only option left is the courts, but this costs money, takes time and there is still no guarantee that there will be any money at the end of the process. Now, finance directors have a better option. A way of generating immediate cash from bad debts to avoid an inevitable Coronavirus cashflow crunch.”

Age of the debt

Azzurro Associates purchases invoices up to a maximum of six years from the due date, paying anything up to 30% of the original invoice value depending on the age of the debt and the credit profile of the debtor.

In addition, it shares a proportion of the collections it achieves, which can be as much as 50%. It buys portfolios of all sizes from £50,000 and above, which may comprise a small number of large invoices or a large number of small invoices, provided the smallest invoice value is greater than £100.

Authorised and regulated by the Financial Conduct Authority (FCA), Azzurro Associates adopts a fair and balanced recoveries process, with a creditor’s brand reputation being of upmost importance. This is achieved by using credit reference agency data to determine the appropriate servicing strategy, allowing forbearance and breathing space where required.

Where customers do not engage in the amicable contact strategy, Azzurro Associates uses a combination of bureau data and the expertise of a panel of preferred collections partners to ensure only the right cases are selected for litigation.

Interim Small Business Commissioner Philip King, whose office champions fair payment practices and supports businesses looking to resolve payment disputes, has asserted that cashflow is critical. King observed: “At times like these we need creative ideas, and I’m delighted to see organisations like Azzurro Associates introduce different and innovative solutions.”

Delivering vital liquidity

Established back in 2017 and backed by a global investment fund, Azzurro Associates is the UK’s only specialist delinquent invoice finance provider, delivering vital liquidity to UK businesses.

A pioneer in the Commercial Debt Solutions space, the company also provides funding solutions against a wide range of other unpaid debts, including portfolios of delinquent commercial loans and receivables.