The Art of Protection
Debtor Protection provides security for your business by protecting you against insolvency or non-payment of invoices by your customers - it is specifically designed for those businesses that have either a Invoice Discounting or Factoring facility with Lloyds TSB Commercial Finance.
Get more information on Debtor Protection
You may run a very successful business, however have you thought about what would happen if one of your customers become insolvent. What would the impact be on your business?
At Lloyds TSB Commercial Finance we have a dedicated team who will work with you and provide you with a low cost, easy to manage, facility which could protect you from potentially crippling losses, when a major customer suddenly fails. We have a wide range of Clients who use this service and we can structure the policy to suit your business.
Why do you need it?
Companies that sell on:
- Because you effectively lend your customers your money, unsecured.
- Because you should protect one of your largest assets - what people owe you.
- Because "Blue Chip" is dead
- Because you never know what may be around the corner.
And because...
“The UK suffered its biggest increase in business failures since 1999 during the first quarter of 2006. This trend looks to continue...”.
One bad debt can wipe out years of work. With a 10% margin, a £5,000 bad debt gives you a loss that requires £50,000 of turnover just to stand still.
Cashflow is the main driver in killing 15,000 small firms a year
What does it offer?
- Offers balance sheet protection.
- Protects your largest asset - your accounts receivable.
- Enhances your business controls.
- Helps spot a potential credit risk problem before it becomes a bad debt.
- Allows bad debt provisions to be reduced.
- Protects your risk against work in progress / timesheets/pre-shipment.
- Releases capital for business expansion.
- Offers protection on domestic and export debts.
- If within 30 days of the start of your agreement we cannot cover at least 55% of your ledger in value you may cancel with a full refund of Debtor Protection fees paid.
How does it work? - its very simple
We will ask you for some basic information and provide you, free of charge, with both a quote for Debtor Protection and an initial assessment of your top ten limits. Once you agree to our quotation, you will be provided with a link to our on-line system where you can request limits on your customers and manage the facility. The system is also interactive, allowing communication with limit underwriters.
There are reporting requirements for you to feed back information on overdue debts (standard terms + 60 days) via the on-line system. This is a very simple procedure, which should take you no more than 15 minutes per month.
What cover is provided?
Insolvency: When a company goes out of business. Insolvency payments will normally be made within 30 days after the receipt of the Confirmation of Debt.
Protracted default: Where a company fails to pay invoices. A protracted default claim may be submitted when invoices become overdue by more than 180 days.
Take-on debt can also be covered.
We cover not only UK debtors, but also Europe, USA, Canada, Asia, the Pacific Rim and many other countries.
Competitive charges
We can offer debtor protection to our clients at extremely competitive rates. These will vary according to size and risk, but will typically range from 0.15% to 0.75% of your annual turnover, but may be lower depending on your turnover and any losses to date. There is no minimum premium.
In 2006 claims in excess of £1.8 million were made and met - we are proud of our 100% record in meeting claims.
“The additional security and peace of mind are the main benefits. We have already had a customer who went under owing us a large sum of money. The insurance saved us most of this loss and the cashflow problems it would have caused.
We felt that the small additional cost was worth it, compared to the damage that a large loss would cause if a debtor went under.”
Steve Rawlins, Director, GMS Thermall
“Quite simply, it gives us an almost instant response so we can decide whether or not to go ahead with a customer, meaning those difficult decisions can now be made in hours rather than days. In today’s competitive market, it really pays to have a product like this up your sleeve.”
James Davies, Managing Director of Derby based Strategic Placements ltd
Turnover |
From start up to multi-national |
Requirements |
Good internet connection |
Service Features |
|
