Debt collection for small business

By Pasecom Group Ltd editorial team · Reviewed 6 November 2026

The fee is 15% of what is recovered, payable only when you have been paid. Recovery is not guaranteed.

Small firms feel unpaid invoices harder than large ones. One late Ltd customer can wipe a month’s margin, block VAT or wages, and burn evenings on chasing. This page is written for that creditor: the owner-managed business that already delivered the work, sent the invoice, and still has not been paid. It is general information for England and Wales, not legal advice. Scotland has different insolvency detail.

Sources checked on 6 November 2026 include Companies House find-and-update, GOV.UK get information about a company, GOV.UK set up as a sole trader, the Late Payment of Commercial Debts (Interest) Act 1998, and GOV.UK late commercial payments guidance.

Who this page is for (creditor vs debtor)

Two roles matter, and they are easy to mix up:

• Creditor (you). May be a sole trader, partnership or limited company — including micro and SME traders. GOV.UK explains how sole traders operate; you do not need to be a Ltd company yourself to place a file here.
• Debtor (who owes you). Must be a UK limited company, LLP or PLC. Consumer customers and sole-trader debtors are outside scope on Debt Collection UK.

That split is deliberate. Partner agencies we introduce to collect commercial company debts. If your unpaid invoice is against a private individual or a sole trader on the debtor side, do not use this form. If you are a sole trader owed money by a Ltd customer, you are exactly who this page is for. More on entity type: sole trader vs limited company and recover unpaid invoices from a limited company.

Check the right company first

Before you instruct anyone, confirm the legal debtor. Trading styles, shop names and brands are not the company. Use Companies House (or GOV.UK’s company information guide) to match:

• the exact registered name on the invoice or contract;
• the company number (8 digits, or SC / OC / NI prefixes where relevant);
• registered office and status (active, dissolved, in liquidation, and so on).

Placing a file against the wrong entity wastes time and can prejudice later steps. If the invoice names a brand but payment terms sit with a different Ltd, fix that mismatch in writing before escalation. Our claim form asks for the debtor Companies House number for that reason.

Single invoices are fine

You do not need a book of aged debt. Partners will look at one clear commercial invoice if the debtor is a Ltd, LLP or PLC and the paperwork is coherent. Typical evidence:

• the unpaid invoice (PDF or image — mandatory on the form);
• contract, purchase order or email acceptance where you have it;
• reminder trail and any part-payment notes;
• debtor company number and registered name.

Most claims partners place are £1,500 or more. That is a commercial practice figure for buyers and agencies, not a court threshold. The form may still accept smaller amounts; buyers’ minimums can differ. Always upload the invoice.

The 15% fee (worked example)

The fee is 15% of what is recovered, payable only when you have been paid. Recovery is not guaranteed.

Worked arithmetic only — not a recovery statistic: if £10,000 is recovered on an accepted claim, the fee would be £1,500 (15%), leaving £8,500 to you. If nothing is recovered, no success fee is due under that line. Agree the assigned partner’s terms before they start. See also no collection, no fee and business debt collection fees.

What SMEs usually try first

Proportionate credit control still comes first:

1. Internal chase. Reminder, statement and a clear final demand with a pay-by date.
2. Decision-maker call. Speak to finance or the person who signed the order, not only an accounts inbox.
3. Letter before action. A concise LBA that follows pre-action expectations for business debts — see letter before action and LBA for business debts.
4. Partner demand. Many clear invoices settle after a professional demand. Use unpaid invoices or business debt collection, or the form on this page.
5. Court or insolvency tools later. A county court claim, statutory demand or winding-up petition is a later option with cost and risk — not the first email after a soft reminder.

Our SME when-to-instruct guide and when to pass an unpaid invoice to a collector cover the cash-flow tipping point in more depth. Instruct when further owner time is unlikely to beat a partner chase on an undisputed file.

Why small businesses instruct (without inventing stats)

Owner-managed firms rarely have a dedicated credit-control desk. Chasing sits with the person who also sells, delivers and invoices. Soft reminders are right at first. They become expensive when the same invoice is still open after a clear deadline, a decision-maker conversation and a proper letter before action. At that point the cost is your time, your cash-flow risk and the chance the debt ages into a harder file — not a mysterious “industry recovery rate”. We do not publish invented success percentages on this site.

Instructing a partner does not mean you have failed at relationship management. It means you are treating an unpaid commercial invoice as a commercial file: evidence assembled, debtor identified at Companies House, and a proportionate next step after internal chase. Many SMEs keep the customer relationship channel open while a partner handles formal demands. That split is normal.

Skip partner collection only when the debt is genuinely disputed, when the company is already in a formal insolvency process with nothing realistic to chase, or when the paperwork cannot identify the correct Ltd/LLP/PLC. In those cases pause, particularise the dispute, or take advice — do not upload a contested file hoping pressure will rewrite the facts.

What to prepare before you upload

Partners work faster when the pack is complete. Aim to have:

• Invoice PDF or clear photo, matching the amount you enter on the form.
• Purchase order, signed quote, or email trail that shows the order was accepted.
• Delivery note or completion confirmation where the dispute risk is “not delivered / not finished”.
• Companies House number and exact registered name of the debtor.
• A short note on reminders already sent and any part payments or promises broken.

Invoice upload is mandatory on the claim form. Contract or PO is optional but useful. Work email and phone let the partner reach you quickly if the debtor raises a query. Debtor type must be Ltd, LLP or PLC — there is no consumer option on this form by design.

How this sits on the escalation ladder

Think of collection as a ladder, not a single button:

• Unpaid invoices — practical start for a clear B2B balance.
• Business debt collection — wider commercial debt path.
• Letter before action — pre-action warning aligned with court expectations.
• No collection, no fee — fee model explained in one place.
• Statutory demand and winding-up petition — insolvency pressure tools with thresholds, cost and dispute risk; usually after partner demand or a money claim, not instead of basic credit control.

This small-business page sits near the start of that ladder: confirm the debtor, assemble evidence, then instruct a partner on an undisputed company invoice. It is not a DIY insolvency filing guide.

Late payment rights (brief)

For many B2B contracts, the Late Payment of Commercial Debts (Interest) Act 1998 and related regulations support statutory interest and fixed compensation. GOV.UK summarises late commercial payments, interest and the £40 / £70 / £100 compensation bands. Those figures can strengthen what you schedule on a claim; they do not force payment on their own, and they do not move a partner’s commission onto the debtor by default. This page is not a calculator — use our late payment interest calculator to work out statutory interest and compensation.

What we do (introducer only)

Debt Collection UK is a trading name of PASECOM GROUP LTD (company 17139327). We introduce unpaid B2B invoices against UK limited companies, LLPs and PLCs to independent partner agencies, who collect. We are not solicitors, not an FCA-authorised debt collector, and we do not run court or insolvency filings ourselves. Creditors can be sole traders, partnerships or companies; debtors on files we place must be Ltd, LLP or PLC.

The fee is 15% of what is recovered, payable only when you have been paid. Recovery is not guaranteed. Invoice upload is mandatory. Ready to instruct on a clear company invoice? Use the claim form on this page.

Frequently asked questions

Can a sole trader or small business use debt collection?

Yes, as the creditor. Debt Collection UK introduces unpaid commercial invoices from sole traders, partnerships and limited companies to partner agencies. The debtor on files we place must be a UK Ltd, LLP or PLC. Consumer and sole-trader debtors are outside scope. See GOV.UK guidance on being a sole trader for the creditor side, and Companies House for checking the debtor company.

Must the debtor be a limited company?

Yes for this site. Partners collect B2B debts owed by limited companies, LLPs and PLCs only. Confirm the legal name and company number on Companies House before you instruct. Trading names and brands are not enough on their own.

Do you accept a single unpaid invoice?

Yes. You do not need a large portfolio. One clear commercial invoice against a Ltd, LLP or PLC is enough to start, provided you can upload the invoice and supply the debtor’s Companies House number. Most claims partners place are £1,500 or more; the form may still accept smaller amounts.

How much does debt collection for small business cost?

The fee is 15% of what is recovered, payable only when you have been paid. Recovery is not guaranteed. On a worked example only: if £10,000 is recovered, the fee would be £1,500 and £8,500 would be due to you. That is fee arithmetic, not a recovery statistic. There is no upfront collection charge from us for placing the file.

What is the £1,500 figure on the form?

It is a practice hint for buyers and partners, not a legal minimum. Most claims partners place are £1,500 or more. Forms may still accept smaller amounts; buyers’ minimums can differ. Always upload the invoice.

When should an SME stop chasing and instruct?

Usually after reminders, a call to a decision-maker and a letter before action have failed on an undisputed invoice, and further owner time is unlikely to improve the outcome. See our SME when-to-instruct guide for the cash-flow tipping point.

Can interest or late payment compensation be added?

For many commercial contracts the Late Payment of Commercial Debts (Interest) Act 1998 and related rules can support statutory interest and fixed compensation bands. Those rights strengthen a claim schedule; they do not guarantee payment. See GOV.UK late commercial payments guidance. This page does not calculate interest for you.

Are you solicitors or FCA-authorised collectors?

No. Debt Collection UK is an introducer only. Partners collect. We are not solicitors, not a law firm, and not an FCA-authorised debt collector. The fee is 15% of what is recovered, payable only when you have been paid. Recovery is not guaranteed.

What happens after I upload the invoice?

We introduce the file to an independent partner agency. You agree the partner’s terms before they start. They chase the Ltd/LLP/PLC debtor. Recovery is not guaranteed. Keep copies of the invoice, contract or PO, and any chasing emails.