This article will provide you with valuable insights into the essential distinctions between credit limits and funding limits.
Understanding Credit Limit vs Funding Limit
1: Credit Limit
The Credit Limit is the level of Bad Debt Protection that is offered by Sonovate, you’ll get 95% protection against any bad debt (net of VAT). It is also defined as the Credit Protected Limit.
2: Funding Limit
A Funding Limit is the total amount of funding that is offered by Sonovate. This may include an element of Non-Credit Protected debt. Any debt we fund above your credit limit will be on full recourse to you for any bad debt.
The Credit Limit and Funding Limit of a client is available to you in Sonoplatform located on the Client dashboard.
The Funding Limit is requested by the customer in Sonoplatform and reviewed by our Credit Risk department.
Your limits are currency-specific, meaning that a limit for GBP & EUR will have to be requested separately.
In addition to this, you can request a limit outside of Sonoplatform via this link: https://www.sonovate.com/credit-request/
If you have a limit approved via the above link, it will not appear in Sonoplatform until you add the debtor and request the limit via the platform.