A new bad debt insurance product focusing on protecting SMEs against bad debts
Lloyds TSB, Lloyds Banking’s commercial finance division, has unveiled a new bad debt insurance product, focusing on protecting SMEs against bad debts – reported SME Web.com.
Over the course of the summer, Lloyds Banking and RBS have been under pressure because of a perceived lack of support to the SME sector. Lloyds TSB Commercial Finance has launched this service to help SMEs guard against bad debts, as insolvencies are forecast to reach record highs.
Debtor Insurance protects a firm’s sales ledger by insuring around 90% of any bad debts, both in the UK and internationally, suffered as a result of customer insolvency or the non-payment of invoices.
Simon Featherstone, managing director of Lloyds TSB Commercial Finance, said: “Even the strongest companies can be significantly affected if a major customer suddenly fails. One bad debt can have a dramatic effect on a firm’s balance sheet and wipe out years of hard work. A GBP5,000 bad debt can create a loss that could require GBP50,000 of turnover for the business just to stand still. We’re seeing more demand from SMEs for a safety net and launched the scheme to meet this need.”
The new product is also available online to Lloyds Banking Group customers, it can also be used by non Lloyds Banking Group customer and all firms that sell to other businesses on unsecured credit terms, as long as they have more than one customer and an anticipated turnover of around GBP200,000 – quoted smeweb.com.