If you are worried about the ability of your customers to pay you for what they have purchased or if a small number of customers represents a large percentage of your accounts receivable or if the non payment of a larger customer could have an adverse impact on your business, then Credit Protection may be an ideal way for you to protect your future income.
Credit Protection is a way of minimising the impact of bad debts, protecting your balance sheet against losses and giving you the confidence to give customers credit. Credit protection is a great solution to protecting future income because it gives your certainty that debts will be paid even if a customer can’t pay or goes out of business.
Credit Protection can help protect your income and can help you grow your business because it gives you the confidence to offer credit and assists you with obtaining the financial information you need on your customers to support their requested credit limits. This allows you to increase sales to new and existing customers, by increasing the amount of credit you offer them.
How it works
Credit Protection is a Bad Debt Protection which complements other business finance solutions, such as Factoring. When combined with Factoring, Credit Protection can provide a robust cash flow solution for your business.
Credit Protection is an agreement between your business and a Credit Protection Company, whereby the Credit Protection Company determines credit limits for customers and pays you if your customers don’t have the financial ability to do so. Therefore you are protected against formal bankruptcy and protracted periods of non-payment.
The benefits of Credit Protection
Bad debts can cause your business to suffer from serious and unexpected cash flow problems, particularly if the debt is caused by one of your larger customers. Therefore Credit Protection can help protect your future income by:
- Preventing against unexpected cash flow problems
- Providing an extra level of credit checks on your customers
- Reducing the cost and time implications associated with bad debts
- Reducing the risk of bad debt
- Providing a level of cover that can grow with your business
- Offering you peace of mind
For further information about business finance please contact our advice team on 0800 597 4757 or apply online using the form opposite.
- Business Finance – home
- Overview of Business Finance
- Finance for Business
- Funding to start a business
- Small business funding – fuelling your growth
- Small business finance for better cash flow
- Finding the best deal – search for funding
- Guide to business overdrafts
- Guide to Business Credit Cards
- Business funding for distressed businesses
- Business finance – protecting future income with credit protection
- Avoiding financial difficulty