Trade Credit Insurance
- Trade credit insurance provides coverage in case the receivables cannot be collected.
- It offers the opportunity to work on credit and open account with buyers in domestic and export markets. Thus, it makes it easier for companies to start new business on new sectors or markets.
- By using credit limits allocated by insurers, companies can monitor their credit risks.
- Companies with policies can focus on reliable customers, favorable payment terms and increase profits.
- Trade credit insurance also eliminates cash flow uncertainty.
- Trade credit insurance policies also offer ease of access to financing as banks accept insured receivables as second degree collateral.
Advantages
- Increasing sales by gaining new customers
- Chance to compete internationally
- Making customer risk measurable
- Protection against doubtful receivables
- Guaranteed balance sheet profit
- Reducing financing costs
What does the policy cover?
- Bankruptcy of the buyer
- Long-term default
- Political risks
Who can benefit from?
- Small scale
- Medium and large scale
- Multinational corporations
