Unpaid invoices can disrupt more than just your cash flow — they can threaten your business’s financial stability and future growth. For SMEs, a single bad debt can lead to delayed operations, strained supplier relationships, and missed opportunities. In today’s uncertain trading environment, protecting your business against customer insolvency is more critical than ever.
At Peak Cashflow, we offer Bad Debt Protection as part of our other flexible funding solutions, giving you the confidence and flexibility to trade securely, even in volatile markets.
What Is Bad Debt Protection?
Bad Debt Protection is a financial safeguard that protects your business in the event that a customer fails to pay or becomes insolvent. It works in tandem with your invoice finance facility, whether invoice factoring or invoice discounting, to reduce your risk and strengthen your cash flow position.
Whether you’re working with a new customer, managing large orders, or operating in high-risk sectors, bad debt protection ensures you can continue to trade with confidence without fear of the financial fallout from customer default.
Our Bad Debt Protection (BDP) service operates seamlessly alongside all of our funding solutions – Invoice Discounting and Factoring providing that extra peace of mind when trading on credit terms. It also provides:
Flexible Coverage – Whether you want to protect a specific customer, a one-off large order, or your entire sales ledger, simply provide us with the details. We’ll assess their creditworthiness and confirm the funding limits available.
Switch on Protection – Once you’re happy with the limits offered, you can easily switch on the cover for those customers providing instant protection against non-payment.
Ongoing Trading – Continue trading and drawing down funds against your invoices through your invoice finance facility as usual.
90% Protection – The BDP product protects up to 90% of the net value of any protected invoice if your customer becomes insolvent.
Claims Process – In the event of non-payment or insolvency, you can submit a claim and we’ll work with you to recover the outstanding balance, minimising the impact on your cash flow.
Ideal for Larger Orders – If a customer has placed a significant order and payment is outstanding, BDP ensures you’re not left financially exposed.
Fully Integrated – BDP works in tandem with your existing invoice finance facility, ensuring there’s no disruption to your operations or credit control process.
Protect your business from bad debt and gain financial stability:
Protect Your Cash Flow by maintaining stability in your working capital, even if a customer can’t pay.
Trade with confidence whilst growing your customer base or take on new contracts without the added credit risk.
Improves your credit control with access to ongoing debtor monitoring and better insights to better inform your trading decisions.
Enhanced funding limits with protection that can lead to improved access to cash with higher advance rates available.
Minimise any financial loss with our efficient claims process, ensuring fast recovery if the unexpected does happen.
“With support for business growth, you can scale confidently, knowing a proactive risk management partner like us backs you. BDP offers the ideal solution for achieving greater financial stability while ensuring your business continues to grow”
As a fully independent funder, not tied to any high street bank, at Peak Cashflow, we offer bespoke flexibility in our services.
That independence means faster decisions, tailored solutions, and a genuine focus on your business goals. We’re also an Employee Ownership Trust (EOT) business, so our team is personally invested in your success.
With over 17 years of experience supporting UK SMEs, we combine personalised service with expert knowledge in credit management control, debt control management, and cash flow finance.
Our team is here to provide you with clear advice, ongoing support, and solutions that grow with your business.
Frequently Asked Questions
on Bad Debt Protection
Bad debt protection is a financial solution that safeguards your business if a customer fails to pay an invoice due to insolvency or default. It works alongside invoice finance or cash flow funding, covering up to an agreed percentage of the invoice value and protecting your working capital.
For SMEs, a single unpaid invoice can significantly impact cash flow and day-to-day operations. Bad debt protection reduces this risk, allowing businesses to trade confidently while maintaining financial stability and consistent cash flow.
Businesses can choose to protect specific customers or their entire sales ledger. Credit limits are agreed based on customer risk and can be adjusted as your business grows.
If a protected customer becomes insolvent, you can submit a claim under your bad debt protection agreement. Once approved, the insured portion of the invoice is paid, helping to maintain cash flow.
No, bad debt protection operates in the background and does not impact your customer relationships or day-to-day operations.
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Ready to Improve Your Cash Flow?
If your business is seeking effective credit control, confidential funding and a finance partner that prioritises your growth, talk to our friendly Peak Cashflow team today.
For an instant quote about how bad debt protection can support your business, please get in touch and we will answer any queries you have.
