Press release
Lloyds TSB Commercial Finance protects against debtor failure
The thought of a major customer going under strikes fear into the heart of every business owner and with almost 3,000 insolvencies in England and Wales in 2004*, the threat is very real. But, peace of mind is at hand in the shape of a new product from Lloyds TSB Commercial Finance which aims to protect its clients from this potentially harmful situation.
Martin Walmsley, head of factoring operations at Lloyds TSB Commercial Finance explains: "The business community is all too aware of the financial consequences should a major customer become insolvent. Indeed, one bad debt can wipe out years of work - with a 10 per cent margin, a £5,000 bad debt gives you a loss that requires £50,000 of turnover just to stand still.
"Debtor protection provides a complete solution for our clients by protecting them against both insolvency and smaller more frequent bad debts such as non-payment of invoices.
"Because you never quite know what's round the corner, this system allows you to spot potential credit risk problems before they become bad debts, allows bad debt provision to be reduced and also releases vital capital to help the business to expand."
James Davies, managing director of Derby-based Strategic Placements Ltd took on Debtor Protection and found that the benefits to his business were obvious. He said: "I chose Debtor Protection because I wanted to have the best possible cover to run alongside my factoring agreement and at the most economical price.
"Quite simply, it has helped make our business decisions easier. 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."
*source: DTI
Lloyds TSB Commercial Finance is part of the Lloyds TSB Group plc.
