Giving out credit to your customers
If you are in business and are used to giving out credit to your customers, it may reach a time and they fail to pay you. This can be due to a number of reasons. It may be due to the fact that they are having financial problems, problems caused by unforeseen circumstances or others may simply refuse to pay if they have problems with you or due to reasons best known to them. Whatever the case, this can be disastrous for your business and when you find yourself in such a situation, it may greatly help if you have trade credit insurance.
Having trade credit insurance has its benefits. It helps you to increase sales opportunities by entering new markets or expanding existing ones. You will have more confidence in giving out credit and taking larger orders due to the security that your risks are less which will help you to increase sales opportunities by entering new markets or expanding existing ones. The end result is that you will be more competitive whether locally or internationally.
When you have trade credit insurance, you will have added security to your accounts and your bank will be more receptive to the idea of giving you more or huge amounts of loan and you will also be able to negotiate for better interest rates.
Insurers are different
Insurers are different and not all of them cover the full spectrum of risks you face or offer the same approach to the management of the company. They also offer different terms for sharing and transfer of trade credit risk. This is because there are different premiums and amounts covered. You therefore need to visit many insurers and compare their terms and policies in order to help you pick what suits you. You need to consider both financial and non financial terms of different insurers before making a decision. Choose an insurer that fully understand your business and work with you throughout the period of your trade credit insurance program.
Trade Credit Insurance Coverage
Trade credit insurance coverage differs from one insurer to another. However the common ones include, Protection against buyer insolvency, a customer’s inability to transfer funds, risks from major events such as war, revolution, insurrection, protection against the cancellation or termination of a contract among others.
For more information on trade credit insurance from IMC Newbury or trade credit insurance brokers, you can contact Atradius trade credit who will be at your service.
