New service paying cash for unpaid invoices could help industry unlock funding crisis


Larger businesses within the foodservice sector with more than £50,000 of unpaid invoices could benefit from a new scheme that buys those invoices for cash, turning a potential bad debt write off into positive cashflow.

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.

It is especially targeting firms within the foodservice and catering sector with between £50,000 and £10m in unpaid bills for which it will not only provide upfront cash, but also share in the collections it achieves on any outstanding debts.

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

“As Covid-19 leads to more businesses failing to pay their suppliers, businesses further up the supply chain need to make sure they don’t run out of cash,” he said.

“When collections activities are exhausted, the only option left is the courts, but this costs money, takes time, and there is still no guarantee you’ll get any money at the end. Now, financial directors have a better option – a way of generating immediate cash from bad debts to avoid an inevitable coronavirus cashflow crunch.”

Azzurro 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.

Interim small business commissioner, Philip King, whose office champions fair payment practices and supports businesses looking to resolve payment disputes, said that cashflow is critical.

“At times like these we need creative ideas and I’m delighted to see organisations like Azzurro introduce different and innovative solutions.”

Azzurro was established three years ago and is backed by a global investment fund. As well as specialising in commercial debt solutions, it provides funding solutions against a wide range of other unpaid debts, including portfolios of delinquent commercial loans and receivables.

The company is authorised and regulated by the Financial Conduct Authority.

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Andrew Seymour

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