Lloyds TSB Commercial Finance has unveiled a service for SMEs to guard against bad debts.

Debtor Insurance protects a firm’s sales ledger by insuring up to 90% of any bad debts, both in the UK and internationally, suffered as a result of customer insolvency or the non-payment of invoices.

About one in every 50 businesses will fail this year alone, with tens of thousands of insolvencies predicted over the next 18 months as a result of poor cash management, according to a report by BDO Stoy Hayward.

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.