Bad Debt protection / Non recourse Archives - XL Business Finance XL Business Finance

Archive for the ‘Bad Debt protection / Non recourse’ Category

Confidential Credit Control

Wednesday, January 18th, 2012

Need help with collecting payments but don’t need or want full factoring? It is not commonly known that it is possible to outsource this function to a specialist credit control company. Why waste valuable time chasing and collecting aged debtors when this can be done on your behalf in a cost effective and efficient manner. Many businesses loose sight that this is probably one of the most important aspects of running a business. XL Business Finance has teamed up with a leading credit control and bad debt recovery firm to provide support and advice to businesses requiring additional help in collecting their debts.

In additional credit control can be provided in a confidential manner with your dedicated creditor controller working as one of your employees. A number of these credit control companies also have their own legal team therefore providing a dove tailed solution should a payment become overdue , disputed or bad. In the current economic climate of slow and bad payers there is evidence to suggest that the quicker and harder you hit your bad debts the more likely you are to recover your monies. Therefore if you find your aged debtor report with too many customers in the 90 day plus column you seriously need some help.

Tags: confidential credit control
Posted in Bad Debt protection / Non recourse, General | No Comments »

Selective Factoring

Tuesday, May 17th, 2011

Selective factoring enables business owners and managers the opportunity to select which customers or transactions they would like to fund, collect and insure against a potential bad debt.

Selective factoring looks at the individual transaction rather than the whole balalnce sheet and debtor book. For smaller or new start business it enables a business to factor selective debts without the need to be tied into a 1 or 2 year contract. In difficult times this obviously helps keep costs down. For larger more established business selective factoring enables factoring of individual invoices where whole turnover factoring isnt needed or wanted.

Obvioulsy there are a number of financial institutions that offer selective factoring. We are able to find the best solution for your needs. Contact us today.

Tags: Factoring
Posted in Bad Debt protection / Non recourse, Business finance, Factoring, invoice factoring | No Comments »

Why do I need bad debt protection?

Sunday, April 17th, 2011

Bad debt protection can be provided on a stand alone basis or in conjunction with a factoring or invoice discounting facility. When provided with factoring or invoice discounting it is known as a non recourse facility. Bad debt protection can be provided by an independent credit insurance company or it can be provided by your bank or factoring or invoice discounting company. The idea is that you are insured if one of customers go bust. However not all insurance is the same and it is probably worth shopping around as their as some big differences between the banks, factoring companies and independent providers.

Tags: bad debt protection, Factoring
Posted in Bad Debt protection / Non recourse, Factoring | No Comments »

Invoice Discounting and bad debt protection

Wednesday, April 6th, 2011

It is commonly thought that bad debt protection or credit insurance can only be provided by the the incumbent invoice discounting or factoring company. It is a little known fact that credit insurance can be provided by an independent third party.

Often the bolt on products provided by banks and high street factoring and invoice discounting companies can be expensive and provide inferior cover. An independent can often provided greater levels of cover for the same customers , at a lower cost and with more protection. As far as we are aware there is only one or two high street finance companies that provide bad debt protection in the event of a protracted claim. Most high street funders only pay out in the event of insolvency which is in contrast to most independent insurance companies that as a matter of course provide cover in the event of a protracted dispute. Worth comparing then

Tags: bad debt protection, Factoring
Posted in Bad Debt protection / Non recourse, Factoring, invoice discounting | No Comments »

Factoring and bad debt protection

Monday, October 25th, 2010

In the current economic climate bad debt protection or credit insurance will provide much needed protection and comfort should any of your customers go bust. However not all factoring companies offer the same level of protection. Therefore when choosing a factoring company it is important that you take this into consideration.

It must also be remembered that most most insurance and bad debt protection will only pay out when a customer goes bust. If for some reason your customer wont pay or can’t pay but hasn’t gone bust then it wont pay out. This is worth bearing in mind.

A bank based factoring company may provide insurance from their own in house insurance company. This may be provide a blanket insurance cover if their are any future problems. However this may be further complicated by the exposure to any one customer. If your exposure is more than say 20% for one customer than credit insurance may be restricted.

An independent factoring company don’t use their own in house insurance but use independent insurance agencies and as such different funders may use different insurance companies and as such levels of insurance from one company to another may vary considerably. It all depends on what their experiences are in varying sectors.

Therefore worth gettting an independent factoring broker to search the market

Tags: bad debt protection, Factoring
Posted in Bad Debt protection / Non recourse | No Comments »

Bad Protection Grows

Friday, April 16th, 2010

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.

Tags: bad debt protection, Factoring, invoice discounting
Posted in Bad Debt protection / Non recourse | No Comments »

non recourse invoice factoring

Friday, December 11th, 2009

Invoice factoring can release up to 90% of a businesses unpaid invoices. Choose the right finance company and it is possible to get the cash released to your bank in 24 hours. However when it comes to providing bad debt protection or a factoring facility with non recourse not all finance companies are the same. As we have mentioned in previous blogs factoring adds value to any business. It is not just about re lasing cash, it is about choosing a finance company that can provide a credit control service in a efficient manner without upsetting any of your customers in the process. The bad debt protection is exactly the same in that not all finance companies are the same therefore it is imperative that you choose the right finance company for your particular requirements.

Bad debt protection is available as an add on the factoring or invoice discounting. The level of bad debt protection will depend on the quality of your debtor book as the level of protection depend s on the credit insured limits available against each of your customers. As different finance companies use different insurance companies to provide their limits you wll get a variety of different opinions across the market place. An independent finance company will use a specialist insurance broker to get the best possible limit. A bank owned factoring company will as a rule use their own in house insurance to provide a non recourse facility. We are aware of one bank applying a £10k insurance against each of its customers debtors. This can work very well if you have alot of smaller businesses on your books. However the same bank is overall applying quite low funding limit against its customers. For example we have seen a scenario whereby a customer had 10 regular customers that it factored with on a regular basis. A £10k insurance back limit was applied to each of these customers therefore in theory providing a total facility of £100k. However the overall facility was limited at £50k. So be careful as finance companies will give it to you on one hand and take it way with another!!!!!!

Tags: bad debt protection, invoice factoring
Posted in Bad Debt protection / Non recourse, invoice factoring | No Comments »

Bad debt factoring

Wednesday, December 2nd, 2009

Bad debt factoring can provide the financial freedom of releasing cash against unpaid invoices, a full credit control function and bad debt protection rolled into one! Ninety percent of businesses go out of business because they run out of cash and not because they are not profitable. In the current economic climate it make sense to out source your credit control to leave you free to concentrate of running your business. If your business has a turnover of circa £100,000 your business will probably be eligible for funding.

Factoring will release up to 90% of your unpaid invoices immediately therefore if you have outstanding invoices of £1.0m it may be possible to release £900k immediately. It doesn’t matter how long the business has been trading or the financial condition of the business there is normally a business to suit your particular circumstances.

A full factoring facility will start from as little as a couple of hundred pounds per month. Be beware however not every factoring company is the same. Banks for example will only chase your top few customers by phone relying on the post to chase your remaining customers. Other factoring companies will chase every single customer by telephone and as such are they are better at collecting your invoices. They will give you the best cash flow. These finance companies can be more expensive but they can potentially add more value to your business.

Bad debt protection or on recourse factoring can also be added for a premium. Again different finance companies are better than others at providing bad debt protection. Different funders use different means to provide bad debt protection and the limits they are set are based on the credit insurance companies providing limits for you customers. In order to find out which finance company is best for your business give us a call for an independent assessment.

Tags: bad debt protection, Factoring, factoring company
Posted in Bad Debt protection / Non recourse, Factoring | No Comments »

Non recourse invoice discounting

Tuesday, December 1st, 2009

Imagine the financial flexibility of invoice discounting combined with the added benefit of bad debt protection. It is no wonder that seventy five percent of the enquiries we get are from customers wishing to insure their debts. However as with any factoring or invoice discounting, there is so many different financial institutions to choose from. XL Business Finance has been helping customers choose the most suitable funding partner for over ten years.

Non recourse is the same as bad debt protection and can be offered as an add on by most invoice discounting providers. Pricing generally starts at between 0.45% of turnover and can be high as 1%. This is addition to the normal discounting charges. As with any form of debtor finance it is important that you choose the right finance company to fund your business. It is no pointy in going for the cheapest bad debt protection if you are not getting the appropriate level of funding. An independent invoice discounting company may use a number of different credit reference agencies to set credit limits whereas a bank will use their own in house insurers. It is worth getting an independent broker to check out a few alternatives. Also beware we have seen some banks recently setting quite high individual credit limits only to take it away by capping the overall facility. Certain independent funders will also go the extra mile to get the best possible funding limits.

Independent Generally speaking 80-85% of of the value of your invoices can be released immediately. Invoice discounting can be either confidential or disclosed however the credit control remains with the business. From the finance companies point of view this facility is more risky than factoring and as such any finance company offering such a facility will carry out an audit to make sure the correct credit control systems and procedures are in place.

Tags: bad debt protection, invoice discounting, invoice discounting company
Posted in Bad Debt protection / Non recourse, invoice discounting | No Comments »

News