Bad Debt Protection: Protect your cash flow and give yourself peace of mind
As a business owner you look to protect yourself from any eventuality that may have an impact on the success of your business, and your debtor book and invoices should be no exception. Research has shown us that 40% of a company’s assets are typically found here so if anything were to happen to your key customers, your business might find itself in a rather tricky situation?
This is where Bad Debt Protection can help.
Why use Bad Debt Protection?
You’ve worked hard to build up a strong customer base, but sometimes for reasons out of your control some of these businesses will fail. In fact in the course of a year the average company will lose more than 3 of its active customers because of financial distress, insolvency, administration or receivership. When this happens, it can have a major impact on your cash flow, and potentially your own success.
With Bad Debt Protection, up to 90% of your eligible liability will be waived, minimising the impact of a failed customer on your business. It provides you with the peace of mind and security needed to grow your business, safe in the knowledge you will not be left out of pocket should one of your new customers not be a success.
Having Bad Debt Protection in place also helps demonstrate to us as your provider that you have good business controls in place, allowing us to be more flexible when it comes to reviewing or increasing credit limits and funding solutions.
- Secure your cash flow - safeguard your business from any potential losses which may occur by formal insolvency
- Confidence to grow - knowing one of your biggest assets as a business is protected
- Have the reassurance of continued monitoring
- Knowledge of payment behaviour with other suppliers
- Access to better informed credit opinions
- Reduced DSO
- Lower bad debt provisions
- Transfer the risk
The Impact of a Bad Debt
- 76% of the time if one of your customers goes into liquidation you will get nothing back
- 7.5p in the £1 is the average amount recovered
- A £1.5m turnover business earning a 5% margin would have to increase its turnover by 30% to recoup a bad debt of as little as £22,500
How does Bad Debt Protection work?
- The financial stability of your Bad Debt Protected customers is analysed and they are each given a specific credit limit
- One of your Bad Debt Protected customers goes out of business
- You make an application against your Bad Debt Protection
- You receive the value of the outstanding invoice, up to the previously agreed credit limit, excluding VAT and subject to your excess
What do we offer?
At Hitachi Capital Invoice Finance we don’t want to over complicate things. We want everything to be as simple and straightforward as possible. That’s why our specialist Bad Debt Protection team will be with you every step of the way.
You’ll be able to add the protection to your Invoice Finance facility at any time and we’ll work with you to help you understand where the potential for bad debt lies within your debtor book. We’ll then look at the appropriate level of protection for your business and put this in place.
Through managing your Invoice Finance arrangement on a daily basis, our Client Managers have a thorough knowledge of your debtor book, so we can spot a change in your customers behaviour and submit an application if they become insolvent. We’ll then manage the entire process for you, and notify you once it is all resolved. All this for just a small percentage of your service fee.
The key benefits of using Hitachi Capital Invoice Finance
- A competitive pricing structure
- No long term contracts
- Experienced Client Managers helping you spot a credit risk problem before it becomes a bad debt
- A specialist Bad Debt Protection team managing the whole process for you
- Protection for up to 90% of all approved bad debts (Subject to excess and VAT)
- Applies to all sales to UK customers and customers based outside the UK
Get in touch
For an informal discussion in regards to your cash flow needs please contact us on