• Eliminate the risk of non-payment from your buyers (domestic and overseas)
• Increase your line of credit from the bank by securitizing your receivables
• Offer more competitive payment terms to your customers
• Bottom line. Protect your bottom line

Raise your hand if you thought we'd be looking at General Motors going into bankruptcy, or Delphi, or any number of companies that have now rocked the balance sheets of numerous suppliers - suppliers who are now not getting paid for product shipped. No Hands...? Moreover, in today's climate, where an increasing number of organizations are looking overseas for increased return on investment, do we really know our creditors well enough? In the United States or overseas, are we absolutely comfortable that we will get paid when crunch time comes?

Trade Credit Insurance has been around for hundreds of years, and is extensively used in Europe as a result of the international nature of Europe's import / export business. Now, as the US shifts to a more global market, the need for trade credit insurance is as high as ever, and vitally important to any organization with receivables on their balance sheet.

What does a Trade Credit insurance policy do?

• It protects your balance sheet against bad debt losses
• By securitizing your outstanding invoices you can satisfy your lender to extend further financing
• Extend more competitive payment terms to your customers while protecting yourself against non payment - and include the insurance cost into the deal
• It allows you to use the protection of coverage to increase overseas

Types of Trade Credit coverage

Domestic:

For sales within the US, coverage is provided for non-payment by a buyer for reasons of insolvency and /or protracted default (slow payment). Coverage is available for a single buyer or an entire portfolio of outstanding invoices.

Export:

For all international sales, coverage is provided for insolvency, protracted default and political events in the buyer's country. Coverage is available for a single buyer or an entire portfolio of receivables.

Coverage is available for short term payments (up to 180 days) and long term payments of up to 5 years.

How much does credit insurance cover cost?

It largely depends on a number of combined factors, including:

• Payment terms
• Industry sector
• Buyer strength
• Country
• Single buyer or multi buyer spread

Rates usually range from 0.10% to 0.50% applied to the dollar amount of insured receivables. In most cases, credit insurance is cheaper than opening letters of credit.

Similarly, you can capitalize on the low cost of a policy to securitize accounts receivable to satisfy the bank's need for collateral against further financing. Then you can use that further financing to grow your business.

Read about Political Risk