A supplier has stopped supply

Stop credit suspends your trading account, usually triggered automatically by an aged balance rather than by a decision about you. Call the credit controller before they call you, agree a figure that reinstates the account, and get it in writing. Where equity exists, the balance can be cleared with funds paid direct at settlement.

Why this is more urgent than a bill

Most cash-flow problems cost money. This one stops the business working. A builder who cannot get materials cannot finish the job that produces the claim that pays for the materials. A workshop that cannot get parts cannot release cars. A café that cannot get stock cannot open properly. Within a week or two the problem has moved from payables to revenue, and the revenue is the thing that was going to fix the payables.

It also spreads. Trade credit insurers and credit reporting bureaus see aged balances, and suppliers talk to each other in tight industries. One stop-supply notice frequently becomes three.

Today

1. 1
   Ring the credit controller, not your sales rep.The rep wants to sell you things and cannot reinstate an account. The credit controller can, and is the person whose decision this actually was. Ask for them by name.
2. 2
   Ask one question: what figure reinstates the account?It is often less than the full balance — the oldest invoices, or enough to bring the account inside terms. You cannot solve a problem whose number you have not asked for.
3. 3
   Get the reinstatement in writing."Pay this and we will reopen the account" in an email. Paying against a verbal assurance and finding the account still closed is a bad week made worse.
4. 4
   Work out what stopping costs per day.Lost production, idle crew, delayed claims, a job that slips past a deadline. That number is what the solution is worth, and it is usually far larger than owners assume when they are looking only at the balance.
5. 5
   Then choose how to fund it.Cash, a payment arrangement with the supplier, or a loan. All three are legitimate; the daily cost from step four is what tells you which.

Switching suppliers: count the whole cost

Clearing the account with a loan

Where there is equity in real property, the balance can be paid directly to the supplier at settlement, which is both faster and more persuasive than a promise. We do not ask for financials, and interest can be capitalised for up to six months, so the business gets its terms back without taking on a repayment it cannot yet meet. A person decides every loan. Every application is read by a Lending Manager and every credit decision is signed off by a person. We do not use artificial intelligence to assess, approve, decline or price a loan.

Where several suppliers are in the same position, dealing with all of them in one settlement is almost always better than clearing the loudest — consolidating them into one facility sets that out.

How much you can borrow

Take the property's value, multiply by 80% for residential security or 70% for commercial, and subtract what is already owing on it. What is left is roughly what is available, between $20,000 and $5,000,000. Several properties can be added together, and the borrower does not have to be the owner — companies, trusts and sole traders — including start-ups, with everyone on title signing. Up to 80% on residential and 70% on commercial. Lower on large acreage, and LVRs may reduce on properties worth less than $800,000.

From the call to the money

What it costs

Priced per file, on the property, the position, the amount and the exit. No rate is published, because a rate with "from" in front of it is the best file's number. How it is priced, and every fee that exists.

Reviewed by Matt Hempel, National Credit Manager