Is Bad Debt Protection Costly?
Has your small business ever been burned by late payment, partial payment, or no payment at all for work your company completed? Over 90% of small businesses experience cash flow issues from slow-paying customers or customers that go out of business. Cash is king, and when your hard work and money get thrown into the garbage of bad debt, it is time to take action using Non-Recourse Bad Debt Protection.
This article shows the value of accounts receivable factoring with Bankers Factoring through our non-recourse factoring service. We provide our clients with B2B credit risk management, so you are protected when an unforeseen customer goes out of business.
What is Bad Debt Protection?
Bad Debt Protection, also known as ‘BDP,’ ‘Debtor Insurance,’ or ‘Credit Insurance,’ is commonly used alongside accounts receivable (A/R) factoring. Credit Insurance provides clients with the peace of mind that if the customer fails to pay for reasons of insolvency or protracted slow pay, the business will have protection from losses. A/R Factoring is also called Invoice Factoring.
Bankers Factoring provides bad debt protection (B2B credit risk management) through our non-recourse AR factoring service. Part of our factoring service includes credit risk management to protect your business from unforeseen circumstances or volatility.
What Does Bad Debt Protection Cover?
As business owners and entrepreneurs, the reliability of our cash flow and the solvency of our customers is paramount. If a customer cannot pay its bills, straining your cash flow can be stressful. However, non-recourse factoring with Bankers eliminates the stress if your customer cannot pay. Our credit protection will insure your open Accounts Receivable if the customer fails to deliver payment.
| Insurance Coverage | Bankers Factoring Bad Debt Protection | Typical Bad Debt Protection |
| Customer insolvency | Yes | Yes |
| Non-payment | Yes | No |
| Disputed debts | No | No |
| Political risk | Yes | No |
| Natural disaster | Yes | No |
| Pre-shipment risk | Yes | No |
| Indemnified debt collection fees | Yes | No |
How to Qualify for Non-Recourse Factoring with Bad Debt Protection
Bankers Factoring works with our clients to customize a recourse or non-recourse factoring solution for your business. When they qualify, our clients benefit from our non-recourse service, as we include our credit risk management (BDP) in our agreement. We offer a low-stress, hassle-free qualification, and approval process, all done conveniently and remotely.
To learn more about qualifying for A/R Factoring with Bankers, please visit our previous article, 8 Requirements to Qualify for Invoice Factoring.
Benefits of Non-Recourse A/R Factoring
Accounts receivable factoring is a business finance vehicle for a company to sell their open A/R to Bankers Factoring in exchange for immediate funding. Factoring is a popular form of business financing to eliminate cash flow gaps from customers with extended payment terms.
AR factoring is a debt-free solution for businesses to receive fast funding when customers have 30, 60, or 90-day payment terms. Bankers Factoring offers customized financing programs from $25,000 to $3 million per month. If your business has open invoices, AR factoring provides the line to meet payroll, cover overhead, and acquire new business.
Why Clients pick Bankers Factoring A/R Factoring:
- We take on the credit risk; bad debt protection cost included
- Same-day funding after approval
- 24/7 A/R management system
- More time to focus on operating the business instead of collections
- Your factoring line grows as you grow
- No hidden fees
How Does A/R Factoring Work?
The process for accounts receivable factoring is quick and easy. Here is how it works:
- Deliver or perform your work.
- Send your invoices to us and your customer.
- We initiate a same-day advance on a percentage of your invoice total directly into your bank account.
- The factoring company sends your invoice to your customer and follows up to receive payment.
- When your customer pays us on their terms, the remaining invoice balance is paid to you, minus a small fee.
To learn more about how A/R factoring with Bad Debt Protection works, visit our article, How Invoice Factoring Works. or call 866-598-4295. Ready for fast funding? Go to our factoring application and take advantage of our accounts receivable factoring services.