Lloyds TSB offers Debtor Insurance to SMEs
by Richard Kilner
Story link: Lloyds TSB offers Debtor Insurance to SMEs
With insolvencies expected to reach record highs SMEs are being offered support by Lloyds TSB Commercial Finance in the form of Debtor Insurance.
The new product protects a firm’s sales ledger by insuring up to 90% of any bad debts, whether originating from the UK or overseas, due to insolvency or unpaid invoices.
A report by BDO Stoy Hayward has forecast that approximately 2% of businesses will fail in this year alone, highlighting the need for businesses to do what they can to guard against a possible domino effect.
Lloyds TSB Commercial Finance’s MD Simon Featherstone has stated that even a strong firm can be substantially affected should it be hit by a major customer going bust.
Featherstone went on to say that the new product has been launched as the bank has seen a rise in SMEs desiring a safety net from such an event.
Debtor Insurance is applicable to this with anticipated turnover exceeding £200,000, that sell to other businesses on unsecured credit terms and who have more than one customer.
Debts are not unrelated to the banking sector itself, which was bailed out by the British taxpayer during the financial crisis and saw RBS and Lloyds Banking Group become part-nationalised.
Last month Reuters reported that the EU Commission may force the superbank, formed by a rushed merger of Lloyds TSB and HBOS, to give up the Halifax brand, something the bank is reluctant to do.