What is Bad Debt Protection And Non-Recourse?

Non Recourse Bad Debt Protection to protect against customer insolvency.Bad Debt Protection (BDP), 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.

BDP can be added to an invoice finance facility.

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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 for each one.
  • 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 between providers, but it is up to 100% of the value.
  • If a covered invoice isn't paid the invoice finance company pays you the balance.
  • There may be a "first loss clause" which is like the excess on car insurance.

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:


Further Infomation

Here is some further information that may be helpful:

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Examples of funders we work with:

ultimate finance group
leumi abl
giant finance
funding invoice