If a scheduled payment fails, we will attempt to collect it on the next working day and contact you to let you know. What happens next depends on how quickly you respond and whether an arrangement has been discussed in advance. A single missed payment that is resolved quickly, with communication from you, is treated very differently from a pattern of non-payment.
Immediate steps after a missed payment
You will receive a notification from us — by email and, if unresponsive, by phone. A late payment fee as set out in your loan agreement will be applied to your account. We will also make a formal note on your account. At this stage the situation is still very recoverable: paying the missed instalment promptly, or contacting us to agree an arrangement, stops the process from escalating.
Credit file impact
We report to commercial credit reference agencies. If a payment is more than 30 days overdue and no arrangement has been agreed, a late or missed payment entry is likely to appear on your company's credit file. This can affect your ability to obtain finance from other lenders. If you contact us before the payment is missed and we agree a formal arrangement in writing, we will reflect that arrangement in any reporting — meaning a managed payment plan is treated more favourably than an unmanaged arrear.
What happens if arrears are not resolved
Persistent arrears without engagement can lead to formal default, which may trigger acceleration of the outstanding balance under your loan agreement. At that point a debt-recovery process begins, which is more costly and disruptive for your business. This is why early contact is so important — once a default notice has been issued, the options available to us narrow considerably.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee required. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: Will a missed payment affect my company credit file?, What options are there if my company cannot pay this month?.