Bad Debt Protection - Telford Jones

What is Bad Debt Protection and how does it work?

Bad Debt Protection is a service that can be “bolted on” to an Invoice Discounting or Factoring facility.It could be a stand-alone product and is simply a way of protecting up to 100% of the value of your invoices against bad debts, and customer failure and insolvency. In the current economic climate, bad debt protection offers you real piece of mind that in the event of a default, the value of any outstanding invoices are covered against these losses. This facility protects your business against bad debts which can lead to business failure, meaning that your business will not be put under pressure by another company’s failure. Bad Debt Protection can be provided across your entire sales ledger or just against selected customers.

The process of bad Debt Protection is simple; you apply for a credit limit against one or more of your customers and after they have been credit-checked, you will receive an upper limit for the customers you have submitted. You are then covered against any bad debts up to the approved credit limit which reduces the risk your business risk somewhat significantly. Your lender or bad debt protection provider will administer the policy for you which permits you concentrate on running your business.