SMEs should ensure they have adequate credit insurance controls in place, as recent research shows the number of bad debts and insolvencies in the UK is set to rise substantially during the first three months of this year, a finance company has warned.A recent report from the Confederation of British Industry (CBI) revealed that 78 per cent of building societies and 30 per cent of banks expect the number of bad loans to go up in the first three months of 2007."There have been a number of predications relating to a rise in bad debt and insolvency this year, and there is no doubt that businesses are under increasing strain," Richard Pepler, managing director at Ultimate Finance, is quoted by as saying. "The SME sector is often the first and hardest hit and even one major customer becoming insolvent could have a catastrophic affect on a business."Many SMEs are already struggling under the burden of late payment, in fact research has shown that it causes one in four businesses failures in the UK, and if indications are correct this is set to get worse over the next few months," he continues. Mr Pepler adds that businesses can protect themselves by taking out credit insurance and carrying out thorough credit checks before taking on a new customer. © Adfero Ltd