What is Bad Debt Protection Or Non Recourse?
Bad Debt Protection also known as Non Recourse provides your business with:
- Protection Against Non Payment by customers due to insolvency or protracted default (terms vary between providers).
It is an alternative to taking out a credit insurance policy, which can be more costly.
How Does Bad Debt Protection Work?
Bad Debt Protection, works as follows:
- As part of an invoice finance facility bad debt protection is an option.
- The invoice finance company credit checks your customers and assigns credit limits.
- Some providers will allow you to select debtors for bad debt protection so that you can reduce costs.
- Providing you trade within those credit limits your invoices are covered.
- The covered percentage can vary but it is up to 100% of the value.
- If a covered invoice isn't paid the invoice finance company pays you the balance.
What Does Bad Debt Protection / Non Recourse Cost?
The cost of the bad debt protection / non recourse option starts from c. 0.35% of turnover. The cost for your business will depend upon the type of facility that you want and the nature of your business. We can find quotations for you without obligation - we provide independent advice: