Beware of identity fraud!
CEO of the IA Group Chanan Hertzberger is a valued cooperation partner of Xolv. The IA Group specialises in resolving and preventing trade disputes between buyers and sellers around the world. In this article, Chanan explains what and especially how the IA Group works, and he is happy to share some tips for entrepreneurs doing business abroad.
How do you do business in high-risk countries?
When you do business internationally, there are certain risks you can hedge. Countries can be directly or indirectly involved in conflicts and this has huge geopolitical implications. Think of China, Iran, Lebanon, the US, Jordan, Saudi Arabia, the ongoing war between Ukraine and Russia and the serious conflict between Israel and Hamas in the Gaza Strip. We reflect on the personal suffering among the people and the many casualties.
State guarantee still allows credit
There is a scheme that allows a company to increase collateral, giving financiers more security in the loan underwriting process. The Dutch government guarantees the BMKB loans provided (also known as state guarantees). The bank can subordinate half of the loan application to a guarantor loan, making the state a guarantor for 90%. What its purpose is? To encourage Dutch SMEs. But alternative lenders are also allowed to provide state-guaranteed loans. And that definitely brings advantages for entrepreneurs.
Insure buyers in high-risk countries
Alongside the ongoing war between Ukraine and Russia has come a new serious conflict, the war between Israel and Hamas in the Gaza Strip. The most terrible thing about this war is the personal suffering among the civilian population and the many deaths and injuries it brings.
SMEs have lost their way
We have written before about the difficulties entrepreneurs face in obtaining financing for their businesses. It appears that over the last 10-15 years, it has become increasingly difficult to raise business finance through the usual channels. We are referring here to general banks. Of these, we no longer have many in the Netherlands. We are talking about ABN AMRO, ING and Rabobank, and maybe we can count Volksbank as well. The first three in particular, with a combined market share of over 80%, have increasingly withdrawn from the SME business finance market in recent decades. While the market grew, lending to SMEs declined by 16% over that period. The number of financings smaller than €250,000 actually declined by 40% over that period.
Is it wise to co-insure political cover?
Even creditworthy international buyers, sometimes cannot make payments through no fault of their own. Just think of a situation in a country where war breaks out. We don't have to explain to you that, as a supplier, you run substantial risks due to unpaid invoices. And yes, you can insure against political instability in your buyer's country. But what exactly is insured?
Debt collection: suppliers to retail sector
You cannot open a newspaper this year without an article about a company or business group in dire straits. The main causes are the expiry of major support programmes in 2022 combined with high energy prices, high interest rates and the (near) recession caused by the war in Ukraine. The mandatory repayment of deferred tax debts undoubtedly also plays a big role. What is particularly striking is that many large but also smaller, lesser-known, retail chains have run into trouble this year.
Right people and right tools
The process of debtor management actually starts before you enter into an agreement with a customer. We will assume for a moment that that process is running, you have the right people in the right place to make sure everything is done to perfection. But of course, there are always ways to optimise.
WHOA is a hot topic
Media coverage of larger retailers in dire straits has made WHOA better known to a wider audience. Think Big Bazar and also football clubs ADO Den Haag and VVV Venlo. But generally, these procedures are not public and the general public is not aware of a WHOA process.
What is going on in the retail sector?
Insurers have been indicating for some time that the number of bankruptcies will start increasing, yet it took a long time before we really saw an increase. After the summer break of 2022, non-payments, collection cases and payment arrangements increased. Only from second quarter 2023 did we see the first major bankruptcies and insolvencies appear in the news. The retail sector in particular is now being hit hard.