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Bibby Financial Services launches debt protection product to reduce insolvency risk

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Leading global debtor finance specialist Bibby Financial Services - Flexible Cash Flow Solutions introduces a new debt protection solution to its financial products range.

Designed to protect businesses against the risk of customer insolvency or prolonged default of payment, Bibby’s Bad Debt Protection responds to concerns amongst business owners by providing cash against receivables, and additionally protecting 90% of the value of any insured bad debt.

Steven Davies, Commercial Director, Bibby Financial Services Australia explains that many businesses are still concerned about the impact of a bad debt on their profitability. With mainstream financiers scrutinising profitability, small businesses can ill-afford to experience bad debts and the loss of ongoing business due to debtor insolvency.

Bad Debt Protection is designed to cover clients if their debtor becomes insolvent or cannot pay. Clients can have peace of mind that cash will continue to flow at a time when insolvencies are high.

In addition to the increasing number of businesses entering external administration as revealed in ASIC’s latest Australian insolvency statistics, cash flow difficulties being faced by businesses have also been highlighted by Dun & Bradstreet’s Trade Payments Analysis for the December 2012 quarter, which shows that firms on average took 52 days to pay their bills while a whopping 62% of accounts were settled late during the quarter.

Dun & Bradstreet’s National Business Expectations Survey for the June 2013 quarter reveals that Australian businesses have pulled back their profit expectations for the coming months as they foresee lagging consumer activity and prolonged tough trading conditions. More than 68% of executives indicated that cash flow was expected to be an issue in the June 2013 quarter, with 28% confirming outstanding receivables as their biggest barrier to growth.

Protection against bad debt would therefore, help offset cash flow problems and business risks. Bibby manages all the administration for debt protection including reporting, making a claim and establishing credit limits on existing and prospective customers, delivering SMEs much-needed time savings.

Bad Debt Protection adds to Bibby’s range of debtor finance, asset finance and invoice discounting products.

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