It’s more important than ever for businesses to protect themselves against the potential ‘domino effect’ of late payments and customer insolvency. The government support schemes available in 2020-2021, which were available to help to suppress UK insolvencies and keep rates low, have now been withdrawn. So what next?
Aside from the obvious benefit of reassurance that you won’t be out of pocket due to a customer payment default, trade credit insurance brings additional plus points and can quite often, more than pay for itself.
Your own suppliers, too, may have greater confidence in your business if they know that you have credit insurance in place, because it is less likely for you to default on a payment to them as a result of cash flow problems caused by the knock-on effect of non-payment to you. Let’s find out why…
Obtain better finance terms
- Companies that insure their receivables give banks/finance providers more confidence to increase funding.
Better margins, more aggressive growth goals
- It may empower you to enter new markets. Trade credit insurance enables confident expansion of the business, and helps businesses to safely sell more to existing customers or expand to new customers.
- It may also be able to offer the opportunity for a business to expand domestically or internationally.
Reduce your Bad Debt Reserve
- It allows you to free up capital for the business to use elsewhere.
Gain in-depth knowledge
- Receive up-to-date information on your customers, sector, and economic trends to help grow safely and securely.
Credit and Collections Cost
- Credit monitoring services that come with trade credit insurance can save on credit and collections costs.
Even if you never make a claim, the policy generally improves revenues and profits without exposing you to further risks.
When incorporating your policy, think back as to why you purchased it in the first place?
- Grow Revenue
- Improve Financing
- Mitigate Risk
Integrating your policy into your existing credit practices is vital to ensure it accomplishes the intended goal for your company.
When the unexpected does happen, it needn’t be a cause for despair. If the right partner is chosen with a well-structured policy for the long-term, this partnership can help solve financial issues that arise and preserve valuable business relationships through inevitable rough patches – all while minimising stress, conflict, and losses to your business.
Which is why credit insurance is designed to protect your receivables from unforeseen customer default.
Trade Credit Insurance provides businesses with protection against failure and substantial delays in receiving payments. What may seem catastrophic at first is bearable with a policy structured to fit your business requirements.
For any Trade Credit enquiries, contact one of our experienced brokers today.