MOST builders merchants manage credit risk the same way: a first late payment prompts a call, a second triggers reduced limits, a third closes the account. It’ s a sensible approach, but it has one structural flaw. By the time a pattern shows up in a merchant’ s own arrears ledger, the customer may already be well into financial distress elsewhere. |
runs in the background of every active account. The accounts that fail without warning are rarely the ones already flagged; they’ re the ones that nobody was watching.
SRG is an approved BMF Business Services provider and further details on the services they can provide can be found in the PDF literature on the BMF website here:
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RSM UK’ s analysis of construction-related winding-up petitions found the highest number in seven years in Q1 2026( 1), while the Building Cost Information Service( BCIS) has repeatedly flagged that risk is concentrated among smaller, specialist contractors who often have the least reserves to absorb a shock( 2). A contractor, juggling multiple suppliers frequently keeps paying the accounts it needs most- typically the ones tied to live sites- for as long as possible, while quietly stretching or dropping others. Which supplier gets paid last isn’ t necessarily the one owed the most; it’ s whichever relationship the customer judges least likely to cut them off immediately.
That means a merchant’ s own payment history is, in practice, a lagging indicator. It tells you a customer has already run into trouble, not that
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they’ re about to. By the time the first missed payment lands, other suppliers, lenders or HMRC may have been seeing signs for months.
External credit information, such as company filings, court records, payment data pooled across multiple suppliers are available earlier than any single merchant’ s own ledger and precisely because no one supplier sees the whole picture on its own. This is the gap that processes such as credit reference monitoring and protection such as trade credit insurance are built to close. It’ s not about replacing a merchant’ s
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own relationship and judgement, but adding a second, earlier-warning layer that draws on information no individual trading relationship can see by itself. As Credit insurers monitor payment behaviour across a wide pool of trade accounts, signs that a customer has stopped paying other suppliers can often be picked up through that shared data, sometimes well before it shows up in a merchant’ s own ledger.
For merchants, the practical shift is moving credit review from an event- something triggered by a missed payment- to an ongoing process that
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https:// www. bmf. org. uk / v2 / BMF2 / Services. aspx
SRG will also undertake a free confidential insurance review for BMF members. Want to know more – contact your BMF Regional Manager or, for further information direct from SRG on their services, get in touch with Lauren Williams at Specialist Risk Group on 07823 561126 or email LWilliams @ specialistrisk. com
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