Protect approved invoices when a customer cannot pay.
Optional bad-debt protection can sit alongside invoice finance, helping protect your business if an approved customer becomes insolvent or suffers another covered failure to pay.
Not sure yet? Check eligibility in 2–3 minutes, or talk to a director.
Approved debtors · if one fails
Customer A fails, owing £42,000
- Customer’s status
- Covered · approved limit
- Can be paid under the policy
- £37,800
- Your loss
- £4,200
Customer A fails owing £42,000. Without cover the loss is £42,000; with 90% protected, about £37,800 can be paid under the policy terms and the loss falls to £4,200.
Subject to policy terms and limits. Illustrative only: the protected proportion, excesses and exclusions are set out in the proposal.
Check eligibilityThe simple version
What is bad-debt protection?
It is optional cover attached to an invoice-finance facility. If a customer approved under the policy becomes insolvent or fails to pay for a covered reason, the protected proportion of the eligible invoice can be paid under the agreed terms.
In short: invoice finance helps with when you get paid; bad-debt protection helps with the risk that an approved customer may not pay at all.
- OptionalAdd it where the customer concentration or risk justifies the cost.
- Customer-specificCover normally depends on an approved credit limit for each debtor.
- Terms applyEligibility, waiting periods, exclusions and evidence are set out before cover begins.
In plain English · Bad-debt protectionCover for eligible invoices owed by approved customers, subject to credit limits, policy terms, exclusions and claim conditions. It is commonly added to factoring or invoice discounting rather than bought as a standalone loan.
Cashbook Finance facts. Cashbook Finance can arrange bad-debt protection alongside eligible invoice-finance facilities. Cover is subject to approved debtor limits, policy terms, exclusions and claim conditions; it protects against specified debtor insolvency or non-payment risks rather than guaranteeing every invoice.
What it covers
Protection built around approved customer risk.
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Approved debtor insolvency
Cover can respond when a customer with an agreed credit limit enters a covered formal insolvency process.
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Protracted default
Some facilities may cover persistent non-payment after the contractual waiting period, even without formal insolvency.
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Eligible invoices
Only valid, undisputed invoices within the approved terms and debtor limit are normally protected.
Important: cover is not automatic for every invoice or customer. Limits, exclusions, notification deadlines and claim evidence all matter; we explain them before you decide.
How it works
Clear limits before you extend the credit.
- 1
Assess the customer
Before credit · a limit
A credit limit is requested and approved for the debtor.
- 2
Raise eligible invoices
Within the limit · on terms
Valid invoices within the limit and policy terms are protected.
- 3
Monitor and collect
Throughout · tracked
Payment performance and adverse events are tracked under the facility.
- 4
Claim if covered
On a covered failure
If a covered failure occurs, the claim follows the agreed process.
The protection works alongside the invoice-finance agreement. It does not remove your responsibility to supply valid goods or services, resolve disputes and follow credit-control and notification requirements.
Facility conditions
Cover is defined by approved limits and policy conditions
Do not assume every customer, invoice or insolvency event is covered. The provider, limits, exclusions and claims requirements are confirmed in the proposed terms.
Credit limits A customer normally needs an approved limit before exposure is treated as covered.
Exclusions Disputes, late notification, pre-existing problems and non-compliance can affect a claim.
Claims process Evidence, collection steps and notification deadlines must be followed.
Protection sits on top of a facility. See how invoice finance works.
Who it suits
Useful where one unpaid account could materially hurt.
Customer concentration
A small number of customers make up a large share of your debtor book or monthly turnover.
Rapid growth
You are taking larger orders or extending more credit than the balance sheet could comfortably absorb.
Long payment terms
Your exposure remains open for 60, 90 or more days, increasing the time in which customer circumstances can change.
Volatile sectors
Your customers operate in markets where insolvencies, project delays or sharp trading changes are more common.
Export customers
Overseas debtor risk can be harder to assess and collect, depending on territory and policy availability.
Contract-led work
Individual invoices are large enough that one non-payment would disrupt payroll, suppliers or future delivery.
Sounds like you? Check eligibility
Before you apply
What we need to review bad-debt protection.
“Before recommending bad-debt protection, I want to understand customer concentration, debtor credit limits and whether the covered risk justifies the premium. If that cannot be explained clearly, the structure is probably not ready.”
Prepare properly
- Bad-debt protection checklistPreparation PDF · Use this before applying so the first conversation is specific rather than exploratory.
- What to prepareApplication prep · A cross-product guide to references, evidence and secure document submission.
- Pricing and decisionsDecision context · Review the commercial factors that affect pricing, availability and structure.
What speeds review
- Customer list and requested credit limits
- Recent invoice history and payment record
- Any known adverse information or disputes
- Existing insurance or protection terms if relevant
- Concentration risk and the impact of a major customer failure
What slows or weakens the case
- Invoices already disputed or overdue
- Customers that cannot be approved for a credit limit
- Late-payment risk being confused with covered insolvency risk
Upload them in the client portal, encrypted in transit and at rest
Verify before you share documents. Three independent registers hold the record for this firm. Cashbook Finance Limited is registered with the Financial Conduct Authority under Firm Reference Number 782472. Registered office: Cumberland House, 24–28 Baxter Avenue, Southend-on-Sea, Essex SS2 6HZ. Companies House 10723098: Active · incorporated 2017. ICO register ZB545200. The register links at the top of this page open each official record. All published figures are collected on the company facts page.
Worked example
When a protected customer fails.
Customer A fails owing you £42,000, within its approved limit, with 90% of the debt protected.
Protection turns a £42,000 loss into a £4,200 one.
| Debt owed when the customer fails | £42,000 |
|---|---|
| Paid under the policy (90%) | £37,800 |
| Your loss | £4,200 |
| Your loss without protection | £42,000 |
Illustrative: 90% protection within an approved credit limit, paid under the policy terms. Claims depend on the limit, the policy terms and following them.
Quick answers
Bad-debt protection FAQs.
Is every customer automatically covered?
No. Cover normally requires an approved credit limit for the individual customer, and invoices must remain within that limit and the policy terms.
Does it cover invoice disputes?
Usually not while a genuine dispute remains unresolved. The invoice must normally be valid, enforceable and undisputed before a protected loss can be considered.
Is it the same as credit insurance?
It serves a similar risk-management purpose, but here the cover is integrated with the invoice-finance facility, debtor limits and funding administration.
How much of the invoice is protected?
The protected percentage depends on the facility and policy. We set out the covered proportion, excesses and exclusions clearly in the proposal.
Does it cover late payment?
Ordinary lateness alone is not necessarily a claim. Some policies include protracted default after a defined waiting period, while others focus on formal insolvency.
Can I add protection to an existing facility?
Usually, yes. Approved customers can be added to cover at the start or later, subject to credit limits and the insurer’s assessment. We confirm what is covered before any change takes effect.
Start an application
Fund your invoices, and protect them.
Not sure yet? Check eligibility in 2–3 minutes, or talk to a director.
Introducing a client? Work with us as an intermediary.