While the US and UK share a language and have a great deal in common, there are many differences that set us apart – some obvious, others more nuanced.
As transatlantic trading becomes increasingly available, it is worth considering the different approaches to debt recovery and collections strategies taken by the two countries. The Gazette, one of our growing list of information providers, took on this issue in a recent article.
Restructuring and managing companies facing financial difficulties is both a science and an art. On the one hand, restructuring and insolvency professionals need to know the rules, regulations and protocols to be adhered to, and the commercial options available to them (the science). On the other, they must be able to identify the correct path for each case (the art).
The goal is always the same – to get the money back. But the lending cultures in the US and UK are quite different throughout the lending cycle, affecting each stage from assessment through recovery.
The fundamental difference between the two is which side of the transaction is favoured; for the US, it is by and large a borrower-friendly culture, whereas the UK has a long history of siding with the creditor. Both approaches are indicative of a broader national characteristic which goes beyond trade and impacts much of how these countries operate.
Read the full article on The Gazette here:
As transatlantic lending becomes increasingly available to financial institutions, Andrew Jackson and Scott Taylor, of Funding Circle, compare debt recovery cultures and collections strategies in the UK and US
As the authors suggest, there is no definite answer to which approach is best for promoting trade; both have pros and cons for both the borrower and the lender, and both have wider implications which affect the business landscape across the country.
Transatlantic trade will continue to rise as the economy becomes more globalised, and could be set to grow significantly in light of the UK’s vote to leave the EU, so it will be increasingly important for insolvency practitioners and restructuring lawyers on both sides of the pond to grasp the legal and sociological landscape at play.
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