Reduce Risk - Support Growth

In today’s economic climate even well-known companies can fail. The size and prestige of your client offers no guarantee of its creditworthiness. If one or more of your clients suddenly fail then that bad debt will directly impact your company’s bottom line.

Few companies can avoid bad debts completely. Most debts are likely to form a substantial and ever-increasing part of your balance sheet and further analysis of this may reveal hidden dangers such as over-exposure in certain markets or to a particular risk. This could result in a massive hit to your company’s profitability and even more critically its cash flow. Whether it is to safeguard against bad debts, or to enhance internal procedures, a sound credit strategy is essential.

Trade credit insurance is now widely available and not just for the larger businesses either. It’s designed to protect against the risk of non-payment of trade debt to your business. Every company is different and your own business will have a unique risk profile. It’s important therefore that you select which parts of your customer base you want to protect. This could include:

• Your total ledger
• Separate U.K. or export ledgers
• Major income accounts
• Selected markets or buyers

Many companies seek growth in new markets overseas, but export sales can represent a challenge to your business, with political unrest, civil disturbance and exchange difficulties adding to the risk of company failure and payment default. So how can you balance the growth potential offered by new markets and mitigate the credit risk they represent?

Trade credit insurance assists the sales effort by identifying secure customers and by providing protection as you expand into new markets and encounter unfamiliar risks. This will enable you to tender swiftly and confidently making your offering more competitive.

The insurance market for trade credit has recently undergone a period of expansion with new underwriters and increased capacity reflecting a greater risk appetite. These factors combined with more flexibility on policy structures and wordings create the ideal environment to reconsider credit insurance.

To learn more, please contact us.