Bad debt protection insures your ledger in the event of a customer’s insolvency or protracted non payment. As a business you protect your assets; offices, plant and machinery, computers, or company vehicles. However, your biggest asset, your debtor book, is unprotected.

Not all finance companies provide bad debt protection in the same way therefore it is important that an insurance product is best suited to your needs

There are three main types of bad debt protection products. As to which one is the most suitable will depend on factors such as turnover and quality of your customers

Stand Alone.  

Bad Debt Protection is a way of insuring your ledger against insolvency. Traditionally this is bolted on to a factoring or invoice finance facility however a standalone facility provided by a specialist insurance provider can be cheaper and provide superior cover. Clients can also choose which debtors they want to insure, and only pay the cost of insurance as and when they fund invoices against that debtor.   Insurance can be provided for international trade as well as domestic

Non-Recourse Factoring

Non Recourse factoring provides businesses with a cash flow finance solution along with the added value of bad debt protection. Factoring provides an immediate injection of cash into the business and will provide a source of funding that will grow with your business. Bad debt protection provides peace of mind that you will get paid in the event of a customers’ insolvency / inability to pay. Factoring also can save valuable management time by chasing and collecting outstanding invoices on your behalf.

Non-Recourse Invoice Finance

Similar to other invoice discounting solutions, non-recourse invoice discounting releases cash against your invoices within 24 hours of issue, giving you access to working capital required for day-to-day activities and business expansion.

What makes non-recourse invoice discounting different from other invoice discounting solutions is that the invoice finance company additionally provides bad debt protection to safeguard your business against the risk of insolvency, and even in instances late payment of debts.

For a free without obligation quote, contact XL Business Finance today.

City centres are in danger of becoming ghost towns as shopping habits change, a committee of MPs has warned.  A fifth of UK retail sales now occur online with that proportion likely to grow, the Housing, Communities and Local Government Committee said.

The Committee called for lower business rates and more regeneration in town centres as well raising taxes for online giants such as Amazon.

The government said it was investing to ensure High Streets “adapt and thrive for generations” but the impact on high streets had been “stark”, resulting in “store closures, persistently empty shops and declining footfall”.

One problem, the committee said, was that High Street retailers paid much higher business rates than online retailers because of their greater reliance on physical premises.

Amazon UK’s rates, for example, are about 0.7% of its UK turnover, while most High Street retailers pay between 1.5% and 6.5%.

To counter this, the MPs said the government should look again at bringing in an online sales tax – an idea the Treasury previously ruled out over concerns it would penalise consumers.

The committee urged it to consider “green taxes” on online deliveries and packaging, as well as higher VAT and a general sales tax.

The revenue raised would be put towards a reduction in business rates for High Street retailers and more funding for regeneration, it said.

The committee also called for planning reforms to create more “green spaces” in city centres, as well as more leisure, culture and social care services.

And it said High Street retailers themselves needed to focus on “experience” and “convenience” to lure shoppers back – for example by extending their opening hours.

High Streets Minister Jake Berry said the government had unveiled a £675m plan to support English High Streets at the last Budget.

“We know High Streets are the backbone of our economy and a crucial part of our local communities, and we want to see them thrive – both now and in the future.

“We’re supporting small retailers too, slashing business rates by a third – building on more than £13bn of rates relief since 2016.”

We have a number of finance options for retailers to support growth and cashflow.  These include Business Loans for any purpose, Asset Finance to fund shop refurbishments of investment in equipment, Commercial Mortgages for buying retail property, Flexible Overdrafts to ease cashflow problems and Merchant Cash Advances which give advances on future sales.

A report produced by the government on late payments and how they affect SMEs shows that the number of average days a business has to wait to get paid is getting longer. 

Many SMEs, especially when dealing with single large businesses, find it difficult to influence the terms of contracts with customers or challenge them over payments.

Bacs Payment Schemes Limited put the total figure owed to SMEs at £14 billion, while the Zurich Risk Index estimated that SMEs were owed £45 billion by larger companies alone, having previously reported that SMEs were owed a total of £225 billion in late payments. The UK performs worse than other countries both in terms of the proportion of invoices that are late, and the total amount of late payments and amount of late payments written off as bad debt.

There is also a wider cumulative effect, where late payments prevent whole industries and sectors becoming more productive and makes them less able to invest in infrastructure and skills. The report found that SMEs write off up to 7.5% of late payments as bad debt. In the worst-case scenario, small businesses can go bankrupt because of the cash flow problems caused by late payments. It has been estimated that each year as many as 50,000 small business go bankrupt with loss of up to 350,000 jobs.

The Federation of Small Businesses (FSB) in June 2018 found that more than a third of small suppliers had had their payment terms increased over the previous 2 years, indicating what it characterises as “supply chain bullying”. SMEs can also face other unfavourable terms. The FSB reported that 12% of SMEs it surveyed had been asked for a discount for prompt payment, 7% for retrospective discounting, 6% for a fee to remain on a suppliers list and 3% had experienced a discount being applied after goods and services had been supplied.

Businesses can consider Factoring invoicing to ease the pressure on cashflow. We specialise in this type of finance so contact us for more information.

Businesses can often feel the pinch at this time of year as bills escalate and cashflow is erratic due to the slowdown of the Christmas period. Add to that quarterly VAT bills and many businesses can find themselves in a difficult situation.

HMRC has escalated business winding-up orders and liquidations and does not grant extra time to pay easily. So, it is paramount that working capital is available for when tax bills are due. All businesses are aware of their duty to HMRC but sometimes it can be difficult to predict a shortfall. We can help you fund all tax bills including VAT and Corporation Tax plus Payroll and other Working Capital finance.

We have a range of finance options to fund cashflow from Invoice Discounting to unsecured loans. If you need help funding a tax bill, a specialist VAT funding loan is a viable option. This short-term lending option has a maximum term of 6 months and low interest rates so you can manage the short term cashflow requirement without it costing a fortune.

Contact us for more information.

We regularly have assets and vehicles for sale which can be purchased on finance.  Check out some vehicles we having coming into stock soon here

The Annual Investment Allowance (AIA) is to be increased from £200,000 to £1million from 1 January 2019.  The announcement should provide a welcome boost to business investment during the Brexit transition period and will return to the £200,000 limit in January 2021. Businesses can claim 100% capital expenditure incurred on most items of plant and machinery of up to £1million a year.

In addition, a new allowance was announced – the ‘structures and buildings allowance’ (SBA) which will give tax relief on eligible construction costs on non-residential buildings and structures from 29 October 2018. The relief will be given at 2% a year on a straight-line basis over a 50 year period.

Under the current system, buildings and structures do not qualify for capital allowances, but allowances are available for plant and machinery inside a building.  Structures and buildings qualifying for the new allowance will include offices, retail and wholesale premises, walls, bridges, tunnels, factories and warehouses. Capital expenditure on renovations or conversions of existing commercial structures or buildings will also qualify. The new allowance will not apply to dwellings or to expenditure on the land itself.

Other announcements in the budget affecting business include:

• The personal Income Tax allowance for 2019-20 will be increased to £12,500
• Basic rate band increased to £37,500
• Higher rate band £37,501 to £150,000
• There is no change to the rate of Corporation Tax, which stays at 19% for the financial year beginning 1 April 2019.
• Two significant changes to Entrepreneurs’ Relief were announced:  Claimants must have a 5% interest in the distributable profits and the net assets of the company to qualify, and separately that the minimum period, during which certain conditions must be met to qualify for the relief, is being increased from one to two years.
• From 1 April 2020, the amount of payable tax credit that can be claimed under the R&D SME tax relief scheme will be limited to three times the company’s total PAYE and NIC payments for the period. Any loss that cannot be surrendered can be carried forward and used against future profits.
• The changes recently made to IR35 arrangements in the public sector are to be rolled out to the private sector. The widening of the off-payroll working rules will take effect from April 2020 for medium and large organisations. Small firms will be exempt.  These changes could see thousands of contractors and consultants paying more in NI contributions and income tax.
• Smaller retailers in England, occupying shop premises with rateable values under £51,000, should benefit from a cut of 1/3 in their business rates bills for 2 years from April 2019.
• The present VAT registration limit (£85,000) and deregistration limit (£83,000) will continue to apply for a further two years; until 31 March 2022.
• The special rate of writing down allowance is being reduced from 8% to 6% from April 2019.
• From 6 April 2020, the government will change the insolvency rules so that taxes collected on behalf of employees and customers, primarily employees PAYE and NIC and customers VAT, will be treated as a preferential creditor on winding up rather than distributed to other creditors.

Our Newsletter this month includes information about a new product providing up to £3million in flexible funding.

Click here to read our October Newsletter

50,000 miles
Spectre Spec
Massive spec
Upgraded suspension
Winch
Roll cage
Kenwood Head unit
Sat nav
Reversing camera
Sub woofer
Ricaro seats
Finished to hi very high spec
Further details on request

Jaguar 2008 XK Coupe 4.2 v8
Automatic
78k miles
Full service history
12 months MOT
Immaculate inside and out

Price on application
Lease, HP and other Finance options available. Contact us for more details.

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Dec 2012 Audi Q7 Special Edition 245 Quatro S line Plus Black Edition
50k miles
Immaculate inside and out
Dolphin Grey
Black Leather
Sat Nav
Rear DVD
Vat qualifying

Price on application

Lease, HP and other Finance options available.  Contact us for more details.