The Original Factory Shop has seen its credit insurance pulled by Euler Hermes follows news of planned stores closures, according to Drapers.
This follows the announcement of plans to shutter portions of its 220-store estate, while negotiating rent reductions on the rest.
Last year the discount retailer reported a profit drop of £3.1 million, despite turnover rising by £5 million to £190 million.
It attributed the profit drop to stock impairment.
Suppliers purchase credit insurance to ensure their losses would still be covered should a company collapse, but insurers either hike the prices or remove cover entirely when a company looks likely to fail before it can pay its creditors.
This year alone insurers have withdrawn cover on Poundworld, House of Fraser and New Look.
The latter two subsequently announced company voluntary arrangements.