Bad Debt Protection Cover
Bad debt protection (BDP) is insurance that shields businesses from the loss of unpaid sales invoices due to B2B customer non-payment. Trading without BDP can be risky.
Obtaining separate BDP cover from us is typically less expensive than having BDP included in an invoice finance facility. Our partnership with a BDP market leader allows us to offer highly competitive rates, improved cover limits, lower excess amounts, including Can’t Pay Won’t Pay.
Please feel free to contact us for a no-obligation BDP quote.
Lenders are more inclined to lend to businesses that have bad debt protection in place due to the following reasons:
- Invoice finance confidence: Bad debt protection allows invoice finance lenders to lend up to your insured limits.
- Competitive edge: BDP boosts confidence to find new customers which can drive profits and financial performance.
- Risk reduction: Bad debt protection boosts creditworthiness, as it demonstrates proactive risk management to lenders.
- Cash flow stability: BDP helps to stabilise business cash flow by safeguarding against the impact of customer non-payment.
- Business continuity: Lenders have an interest in supporting businesses that can sustain operations and pay their debts.
What are the advantages of Bad Debt Protection?
Insurers pay when your customers Don’t
Bad debt protection insurance safeguards businesses against the risk of non-payment or insolvency of their customers. If a customer fails to pay due to bankruptcy, protracted default, or other covered reasons, the insurance policy covers the insured outstanding amount. This minimises the financial losses and ensures the business’s cash flow remains intact.
Insurers provide an early warning system
Bad debt protection insurance often includes credit assessment services. Insurance providers assess the creditworthiness of potential customers, helping businesses make informed decisions about extending credit. This enables businesses to mitigate the risk of bad debt by identifying customers with higher credit risks and adjusting credit terms accordingly.
More Confidence to Expand
With bad debt protection insurance, businesses can confidently expand their customer base and enter new markets. The insurance coverage provides a safety net, allowing businesses to offer credit terms to customers who may have otherwise been considered too risky. This can lead to increased sales opportunities and business growth.
Peace of Mind
Having bad debt protection insurance provides peace of mind to businesses, knowing that they are protected against potential losses resulting from customer non-payment. This allows business owners to focus on their core operations and growth strategies without constantly worrying about the financial impact of bad debt, including Can’t Pay Won’t Pay.