With UK insolvencies rising and ongoing uncertainty in parts of the economy, increasing numbers of businesses are taking out trade credit insurance to protect themselves against the risks associated with selling goods and services on credit.
It’s an area that TL Dallas is an expert in, and we’re currently supplying trade credit insurance to clients across all industries, but what is trade credit insurance, and how can it benefit your business?
Here’s everything you need to know about trade credit insurance….
Trade credit insurance protects businesses that sell goods or services on credit terms, from the risk of non-payment by their customers, or if invoices aren’t paid within the agreed payment terms.
When a business purchases trade credit insurance, the insurance provider will typically perform a credit assessment of the company’s customers to determine their creditworthiness. If a customer defaults on a payment, the insurance provider will pay out an agreed percentage of the amount owed to the business.
Key benefits of trade credit insurance include:
1. Protection against bad debt – with trade credit insurance in place, businesses can protect themselves against the risk of non-payment by customers, reducing the impact of bad debt on their cash flow.
2. Increased confidence – by being protected against bad debt, businesses can be more confident extending credit terms to their customers, which can lead to increased sales and revenue.
3. Improved access to finance – certain lenders may be more willing to provide finance to businesses that have trade credit insurance in place, as it provides an additional layer of security for their cashflow.
4. Assistance with debt collection – some products provide additional coverage for legal fees and other costs associated with debt collection if a customer fails to pay.
5. Supporting expansion – in some instances expanding into new markets or territories can be risky, but trade credit insurance helps to mitigates this.
6. Additional financial protection – certain insurers offer credit analysis and risk assessment services as part of their coverage, which can help businesses to make more informed decisions about which customers to extend credit to and at what terms.
7. Bespoke products – our trade credit insurance policies can be tailored for all types of business, from regional SMEs to large corporates that are trading globally.
To find out more about trade credit insurance and how it can protect your business against the financial impact of non-payment, contact TL Dallas:
01274 465 500 email@example.com
01324 717 466 firstname.lastname@example.org