The printer
Printers should be concerned. The limits are unbelievable. We turn over £2m a year and one paper company will only give us credit of £4,000 a month. How can we work with that? Yes, they’ve have to look after their business, but they are in danger of losing business. Most printers aren’t cash rich. That’s not to say printers are bad or unsafe businesses. In fact, our business is growing. I can see their side of the argument – we’re all a little bit more cautious these days. If I suddenly got a new client that wanted to spend a lot of money with me, I’d be a little bit suspicious too in today’s climate. But I want to spend more money with certain paper companies and they’re making it difficult for me. I’m amazed at how quickly the goalposts have moved. It’s a whole new culture. Paper is the lifeblood of our industry and if the print industry can’t buy paper on the right terms, I can’t see how it will survive.
Keith Cooper, finance director, Bracknell Print Room

The merchant
The credit crisis is of serious concern to all suppliers. It is not surprising that the credit insurance community is being more risk averse, particularly if they can’t hedge the risk by using the re-insurance route. With the large losses in recent months and unprecedented claims materialising, we are finding that many insurers are reacting much more aggressively with reduced or cancelled cover where there is a slightest inkling of increased risk. Customers who do not have sufficient reserves to ride out the downturn or who are heavily burdened with debt are the most vulnerable at this time. It is more critical than ever to have regular tri-party dialogue between insurer, supplier and customer so that continued support is obtained based on the latest information available. It is, however, inevitable that merchants will be forced to take a larger slice of uninsured risk no matter how uncomfortable this may seem or the knock-on effect of reducing limits will exacerbate the failure rate within the industry. The unenviable task of the credit manager is to decide which horse to back.
Steve Parkins, credit manager, Antalis UK

The finance specialist
The credit insurance problem has two dimensions. The insurance companies are considering printers’ customers as being a risk. If the printer insures his debtors, he finds some of his clients liable to be precluded from insurance or to be subject to a much higher premium. Print firms are also subject to the same scrutiny, and paper merchants and other suppliers are struggling to obtain credit cover before supplying paper and consumables. In either case, it is a potential problem for printers relying on credit rather than their own business funds. In a volatile market, the potential for bad debt or higher insurance costs must be a worry. As profit levels are already severely reduced, the printer is once again under pressure and at increased risk.
Paul Holohan, chief executive, Richmond Capital Partners