What is Debtor Protection, or Debtor Protection Insurance?

Debtor Protection insures your business against the risk of debtors failing to pay. This protects a company from not only bad debt, but also a protracted default, whether debtors are based in the UK or overseas.

With some 5m SME’s in the UK, accounting for 60% of all private sector employment as well as 36% of GDP it is vital the SME sector is adequately supported so that UK economy be an efficient hub for growing businesses and lessen the impact of bad debts, late payment problems and the effect of these on cash flow and resultant business failures and or Company Voluntary Arrangements (CVA’s).

Bad debt is a risk that every business faces, increasingly so in the current economic climate and whilst your own business may be well run successful business, it is the impact upon your business if a major customer became insolvent that Debtor Protection insures against.

What are the Features & Benefits of Debtor Protection?
Typically, 90% of the value of a bad debt is insured, it can cover both overseas and domestic debt, it usually includes a credit monitoring service to evaluate your trade debtors to help you identify a potential credit risk before it becomes a bad debt and many come with an online claims handling process so make the cover easier to use if a bad debt arises.

Cost of Debtor Protection
The cost of Debtor Protection, or Debtor Protection Insurance  will vary greatly on the type of business you have, the sector it operates in, your invoicing terms and the status of your debtors ledger upon starting the cover.

Factoring Finance can find the product most suitable to your budget and needs but costs typically range from 0.15% to 0.85% of your annual turnover.
Debtor protection can, and often is run along side many invoice finance services so as to ensure that both the factoring business and the factoring funder are adequately covered against the risk of debtors going out of business.

For more details on how Factoring Finance can help you avoid late payment problems, cash flow difficulties, and improve your debtors book with, Invoice Finance products such as Invoice Factoring & Invoice Discounting or other Commercial Finance and/or Credit Insurance, simply get in touch and we’ll do the rest.

The provision of credit or leasing services by is subject to your meeting a funders credit approval.  Please ensure that you only apply for credit or leasing services that you can comfortably afford.

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