Trade Credit Insurance | Insurance for Trade Finance
It is generally agreed that in the UK around 80% of business-to-business transactions are based on credit terms. Credit insurance will protect your business against non-payment of commercial debt. Thus, it makes sure that your invoices will be paid and allows more effective management of the political and general commercial risks that are inherent in transactions.
Credit insurance indemnifies losses incurred from non-payment of commercial debt and the aim is to avoid large losses and help your business grow profitability. The key aim is to have the best information about sectors, the companies that you are dealing with and trends within the economy. This will allow your business to make informed credit decisions and minimize losses.
Unpaid invoices of a company will usually stand around 40% of a company’s assets and natural uncertainty is created due to the fear of non-payment. It is also difficult to have sufficient knowledge about your customers’ solvency.
It is important to have the right credit insurance and pick the markets credit limits correctly, to reduce non-payment of commercial debt. Having the right insurance in place will allow greater credit amounts being advanced to customers and working with larger and more risky customers. In the event of failure to pay, the credit insurer will advance the monies for the insured invoices and look after any debt collection. A business default can mean a huge impact on the profitability of your company.
Bonds, Guarantees and Letters of Credit
Structured Terms of Payment
Currency Exposure and Risk Management
Shariah Compliant Finance
Benefits of Credit Insurance
- Could protect your company against bad debts
- Worry less about your customers’ solvency
- Avoid large losses and help your business grow profitability
- Work with larger and more risky customers