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Credit limits hit firms hard

16th January 2003
Page 6
Page 6, 16th January 2003 — Credit limits hit firms hard
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Which of the following most accurately describes the problem?

• More operators have spoken out in protest against fuel companies slashing credit limits, which is endanger** their businesses.

This follows claims by Ayrshire-based McGawn Bros that it was almost driven to the wall when Shell cut its credit limit from 160,000 to zero over a matter of days (CM19 Dec-1 Jan).

Now John Lambert, partner in Huddersfield-based Moorcroft Transport, says oil firm Petroplus halved its credit limit to £15,000 after he failed to provide accounts in time. He had been a customer for ten years and says he had always paid his bills.

"They sent a letter out of the blue wanting to review our account," he says. "I said I couldn't magic [the accounts] out of thin air they put me In a hell of a position."

Lambert says he was given a month to supply up-to-date accounts, which his accountants held, but he was unable to do this in the time given. In a letter to CM, he says he had to make a driver redundant and cut his fleet back as a result.

Owner-driver John McCrory is also amazed at the treatment he received from Shell after he protested at providing them with accounts. He claims they demanded his fuel cards back after he told them his accountant held them.

"They never had problems getting payment," he says. "I can see the sense of seeing a new customer's accounts. I told Shell to stop my cards."

Petroplus credit manager, Gareth Evans, says it is unable to comment on individual cases, but admits it does exercise strict controls. He adds that the policy has not been tightened recently.

A Shell spokeswoman says it has always adopted a strict credit policy. However, it has been enforced more rigorously over the last 12 months.