Secure Your Credit Risk

During these uncertain economic times, insuring a company’s credit risk has never been more important. Whilst the unstable currency and Brexit is producing economic challenges, it can create opportunities for UK exporters too.

If we take a quick recap of the last 18 months, it’s fair to say it has been an interesting year politically with the EU referendum, UK general election and Brexit. With Brexit negotiations under way, many businesses worry how this will impact them and credit insurers are also not sure at this stage what the true impact of Brexit will be on the wider economy.

Leading provider of trade related credit, Euler Hermes, has researched the potential outcome of these negotiations and what this could, in turn, mean for UK firms. Euler Hermes found three possibilities:

  1. There is a 25% chance of an extensive free trade agreement. It is thought this would have a limited impact on the economy and sterling would likely appreciate.
  2. The probability of a limited free trade agreement is thought to be approximately 55%. This may not be too detrimental for UK firms and UK exporters of goods, as tariffs would be low – perhaps only 1-3%.
  3. Exporters of services could be higher and currency would be devalued by around 5-7%.

There is a concern the last scenario may cause the economy to slow down and insolvencies would start to increase.

The research also suggests there is a 20% chance of no agreement. This would see currency depreciation of 20% with inflation increasing and a full scale recession by 2019.

Whilst there is a great deal of uncertainty on the horizon, from change comes opportunity and firms may now start exporting or looking at different markets to do business.

TL Dallas is committed to supporting their clients through the various business challenges they face as they journey through the changing economic environment.

Investing in Credit Insurance provides protection for businesses against the non-payment of a trade debt and provides greater insight into customers’ financial health. As one of the leading independent Credit Insurance brokers in the UK we have the knowledge and market leverage to offer specialist advice and guidance to our clients.

Client Giles Drew, North Allerton Auctions, comments,

“I had worked with Sarah Aldridge before when she looked after our previous credit insurance policies. She had originally been recommended by a customer who had been well looked after by her. We stopped insuring our debts for a time but knew the value in looking at this again given the current economic climate. We worked closely with Sarah and put a policy in place to protect our business against bad debt, protecting our balance sheet, working capital and profits in 2017. When one of our clients went bust being with a pro-active broker made all the difference. TL Dallas made sure we got money back into the business quickly, protecting the future of our business both from a cash flow and balance sheet point of view. Without credit insurance in place a bad debt of the size generated by our client’s collapse could have had a seriously detrimental impact on the business. I couldn’t recommend the services of Sarah Aldridge and TL Dallas’ credit insurance team more highly.”

 

For impartial specialist advice, or to discuss the right solution for your business, please contact our Credit Insurance team on either 01324 717466 (Falkirk) or 01274 465522 (Bradford).

 

Posted by Pippa Dougherty | Tuesday, November 21st, 2017 Back to News