Trade Credit Insurance
The cold prospect of being suddenly exposed to bad debt can bring a business to its knees by cutting off vital sources of business income and starving the business. This is a cold, hard prospect faced by many, from big international distribution companies to small local manufacturing businesses.
Trade credit solutions protects the business and owner from non-payment of trade debts because of insolvency (also known as receivership, bankruptcy, liquidation and administration) as well as protracted default, both locally and internationally.
Our trusted Authorised Representatives cater for the realities of assisting clients to face these dreaded circumstances and will ensure that an offering around Trade Credit Risk is designed to best mitigate your worst expected scenario. Our team can provide you with solutions around catering for offshore transactions and they can customise your risk solution to indemnify against contract repudiation as well as political risk.
In summary the key benefits of this risk tool:
- Protection of receivables – protecting you against non-payment of debt due by a client and exposing your business to loss of income and bruised cash flow.
- Support in managing credit risk – assisting your business to ably manage client credit through the added benefit of the insurer’s extended database, backed by extensive knowledge of both local and international businesses.
- Cost-saving – this product has enabled companies to save substantial expenses relating to information, analysts, collection expenses as well as provision for write-offs and bad debt to name but a few.
- Leveraging credit cover for financing needs – securing a business’ receivables is looked upon favourably by financial institutions and could include tangible benefits like increased financing for the holder of the policy, favourable financing terms and improved financing ratios on the business’ balance sheet.
- Increased profitability and revenues – increased sales (not necessarily conducted in the absence of credit insurance) are often enabled by ensuring the credit of local and global clients. This allows businesses to sell on extended terms in certain cases and to be able to trade with unknown clients with unfamiliar credit backgrounds.
- Access to reputable debt collector services – most policies include Credit Insurers contributing to the cost of having credit collected from clients.