As a business dealing with customers, there’s often a risk that those customers will fail to pay the money owed to you, whether it be a late payment, or worse, a customer going into administration. Losing the money owed to you can have detrimental effects to your business, particularly if it involves key customers. Bad Debt Protection (BDP) is a great option for any business wishing to safeguard against these potential losses.
With Skipton Business Finance, you can access BDP as an add-on service to your existing Invoice Finance facility, which allows you to protect your business against bad debt caused by customers failing to pay.
There are many benefits to having BDP:
It’s secure - you can be protected for up to 95% of the value of an invoice, should your customer fail to pay or go into administration.
It’s fast - in most cases, the Bad Debt Protection limit decision will be within 24 hours.
You can trade with confidence - knowing you’re protected and that you will receive payment for the work you’ve done, or products you’ve sold, allowing you to develop and grow your business in-line with your plans.
You could access increased funding - if BDP is in place on a customer, this often means we can increase that customer’s funding limit in-line with the agreed BDP limit.
It gives you better insight - BDP gives you access to greater customer intelligence that leads to balanced risk decisions. We can help you spot a potential credit risk before it becomes a bad debt. Understanding a customer’s credit risk means that, armed with this knowledge, you can act before they become a bad debt.
You can manage business on your own terms - choose the service that suits your business needs by protecting all of your customers, or just a selection.
Is Bad Debt Protection right for my business?
BDP can provide you with peace of mind if:
· you want to protect your cashflow
· you want to grow, knowing your sales ledger is protected
· you have had one or more previous bad debts
· you want to mitigate the risk that a small number of
· customers represent a large percentage of your sales ledger
How much will it cost?
The costs of our BDP depends on each business. We don’t offer a ‘one size fits all’ product and, instead, tailor each facility to the individual requirements of each business. We provide competitive and transparent charges, with the costs being outlined in your facility offer letter, as well as any additional fees.
How does it work?
BDP ensures that you are protected against any bad debt caused by failed customer payments.
Simply put:
1. You can choose to protect the whole of your sales ledger or selected customers.
2. We will confirm a BDP limit for the customers you requested limits on. If we cannot provide a limit, we will confirm the reason why.
3. We can provide up to 95% of the debt outstanding, excluding VAT, as long as the balance exceeds £500.
4. BDP can protect both UK and export customers.
5. It compliments your Invoice Finance facility, with minimal additional administration for you.
Bad Debt Protection alongside your Invoice Finance facility can give you peace of mind, without having to worry about late payments or debt caused by failing customers.
If you’d like to find out more about Bad Debt Protection from SBF, please visit our dedicated BDP page.
Whether you’re new to Invoice Finance, or an existing SBF client who’d like to benefit from SBF, we’re here to help. Enquire today to see how BDP could support your business.