What Is Commercial Debt Recovery? A UK Business Owner’s Guide

When another business fails to pay you for goods or services, it doesn’t just hurt your bottom line — it threatens your ability to pay staff, suppliers, and sustain growth. This is where commercial debt recovery comes in.

In this guide, we’ll explain what commercial debt recovery is, how it works in the UK, and what steps you can take to recover what you’re owed.

What Is Commercial Debt Recovery?

Commercial debt recovery refers to the process of collecting unpaid debts between businesses — often called B2B debt. It’s a legal and strategic approach to chasing overdue payments without damaging your business reputation or breaching regulations.

Unlike consumer debt, commercial debt involves two entities engaged in trade or services. It’s governed by UK business law, particularly the Late Payment of Commercial Debts (Interest) Act 1998.

Common Scenarios for Commercial Debt Recovery

You may need commercial debt recovery services when:

• A customer refuses to pay after receiving goods or services

• You’ve issued multiple reminders with no response

• The client is ignoring your final demands or letters

• A debtor disputes the invoice unfairly

• You're dealing with persistent late payers affecting cash flow

How the Commercial Debt Recovery Process Works

Here’s a breakdown of a typical UK commercial debt recovery process:

1. In-House Follow-Up

Before escalating, chase the debt internally:

• Send email reminders

• Make follow-up calls

• Issue a Letter Before Action (LBA) — a formal legal notice demanding payment

2. Instructing a Debt Recovery Agency

If the debtor ignores internal efforts, you can appoint a specialist commercial debt recovery agency. These agencies:

• Handle communication professionally

• Preserve your reputation while applying pressure

• Often work on a “no win, no fee” basis

3. Legal Action

As a last resort, your agency or solicitor can:

• File a claim in the County Court

• Obtain a County Court Judgment (CCJ)

• Enforce the judgment through High Court Enforcement Officers (HCEOs)

In some cases, a Statutory Demand can be issued — a formal step before potential insolvency proceedings.

Your Legal Rights in the UK

UK businesses have specific legal protections when dealing with overdue commercial invoices:

• Statutory Interest: You can charge 8% above the Bank of England base rate

• Debt Recovery Costs: Fixed fees based on invoice size

• Contractual Terms: If your contract includes late fees or shorter payment terms, those apply

These legal rights apply automatically unless your contract says otherwise.

Benefits of Using a Commercial Debt Recovery Specialist

Here’s why many UK businesses outsource their debt recovery:

• Save time and reduce stress

• Higher success rate due to professional negotiation tactics

• Protect your commercial relationships

• Avoid court proceedings where possible

• Focus on your core business while experts chase the debt

How to Choose a Debt Recovery Agency

Look for an agency that is:

• Transparent about fees (especially “no win, no fee” models)

• Compliant with UK debt recovery laws

• Experienced in your industry

• Able to escalate cases legally if needed

• Focused on results, not aggressive tactics

Final Thoughts

Commercial debt recovery is a critical tool for UK businesses facing unpaid invoices. Whether you're a small business or a growing enterprise, you deserve to be paid on time — and you have legal rights to make that happen.

If you're dealing with overdue B2B payments, now is the time to act. The longer a debt goes unpaid, the harder it is to recover. Don’t let late payments put your business at risk — get expert help today.