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Bad Protection Grows

It appears according to a number of factoring and invoice discounting companies  that bad debt protection is one of the fastest growing finance products. Bad debt protection is added onto a factoring or invoice discounting facility and provides an insurance policy against any of your debtors going bust. It is otherwise known as non recourse factoring or invoice discounting.

These figures support and emerging trend for better organised businesses to protect themselves against the recession. Businesses have been driven to asset based lenders early in the recession for their accessibility an reliability as the banks become more difficult to deal with and pulled down the shutters. Even as we speak the importance of asset based lenders is taking on a greater importance as factoring and invoice discounting facilities are able to link their facilities to sales performance. This market is uniquely equipped to protect against over trading by ensuring that appropriate levels of funding are provided against a businesses sale ledger.

Experience suggests (and it was someone older than me that told me) that insolvency increases as we come out of a recession, so it makes to sense to protect your business with bad debt protection. As with any finance company, different factoring and invoice discounting providers provide different levels of bad debt protection. The banks tend to use their own in house insurance companies whereas the independents obtain their bad debt protection from independent insurance companies.  Which one is better for you depends on the spread and quality of your debtor book.  As one of the countries leading invoice discounting and factoring broker, we can help you obtain the best level of bad debt protection.

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