Trade Credit Insurance

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Credit Insurance

When it comes to trading on credit terms with your customers, you can never be too careful. If they default, or become insolvent, you could be left with some bad debts that can put your business at risk.

Here at All Star Funding Solutions, we understand the potential outcomes, and the importance of an insurance policy to provide protection.

That’s why we help to broker credit insurance for a variety of businesses and companies.

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What is Trade Credit Insurance?

Credit insurance is a type of insurance that protects businesses against losses caused by non-payment of debts owed by customers. In other words, it is an insurance policy that provides coverage for businesses in case their customers fail to pay their debts due to insolvency, bankruptcy, or other reasons.

Credit insurance can help businesses manage credit risk and protect their cash flow, especially if they rely heavily on a few large customers. It can also give them the confidence to extend credit to new customers, knowing that they are protected if those customers are unable to pay.

Credit insurance policies typically cover a percentage of the outstanding debt, and may include additional benefits such as credit monitoring and collection services. The cost of credit insurance will depend on various factors, such as the industry, the creditworthiness of the insured, and the level of coverage required.

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Why Use Trade Credit Insurance?

Credit insurance is a fantastic way to safeguard your business. Protection from the negative impact and potentially disastrous effects of bad debts.

In fact, although credit agreements are a common trading practice, around 25% of business bankruptcies are directly related to unpaid invoices. This goes to show that credit agreements may be more commercially risky than you realise.

After all, with a credit agreement, the payment itself can feel beyond your control. As a result, it’s obvious that credit insurance is an intelligent investment.

Protecting your cash flow, supporting business growth, and removing the need for bad debt reserves. There are a large list of benefits which credit insurance provides.

Benefits of Trade Credit Insurance:

  1. Protection against bad debts: Credit insurance protects businesses from the financial impact of non-payment or delayed payment by customers due to insolvency, bankruptcy, or other reasons. This helps to reduce the risk of bad debt, which can have a significant impact on a company’s cash flow and profitability.

  2. Enhanced cash flow management: With credit insurance, businesses can offer credit terms to their customers with more confidence, knowing that they are protected against non-payment. This can help them manage their cash flow more effectively and improve their overall financial stability.

  3. Access to better financing terms: Credit insurance can make businesses more attractive to lenders, as it provides an additional layer of security for the repayment of debts. This can result in better financing terms, such as lower interest rates and more flexible repayment terms.

  4. Improved customer relationships: Credit insurance can help businesses maintain positive relationships with their customers by offering flexible credit terms while protecting themselves against non-payment. This can lead to increased customer loyalty and repeat business.

  5. Credit monitoring and risk assessment: Some credit insurance policies include credit monitoring and risk assessment services, which can help businesses make informed decisions about which customers to extend credit to and how much credit to offer. This can help to reduce the risk of bad debt and improve overall credit management practices.

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Why use a Credit Insurance Broker?

Using a credit insurance broker can offer several advantages to businesses seeking credit insurance coverage:

  1. Access to a wider range of options: Credit insurance brokers typically have relationships with multiple insurance providers and can offer businesses a wider range of options to choose from. This can help businesses find the right coverage for their specific needs at a competitive price.

  2. Expertise and advice: Credit insurance brokers have specialized knowledge of the credit insurance market and can provide expert advice on coverage options, pricing, and risk assessment. This can help businesses make more informed decisions about their credit insurance needs.

  3. Time savings: Shopping for credit insurance can be time-consuming, especially for businesses that are not familiar with the market. A credit insurance broker can save businesses time by doing the research and negotiations on their behalf.

  4. Claims assistance: Credit insurance brokers can assist businesses with the claims process, helping to ensure that claims are handled quickly and efficiently.

  5. Ongoing support: Credit insurance brokers can provide ongoing support to businesses throughout the life of their policy, helping them to manage their credit risks and optimize their coverage over time.

Overall, using a credit insurance broker can help businesses find the right coverage at a competitive price, while providing expert advice and ongoing support to help them manage their credit risks effectively.

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How to apply for Trade Credit Insurance?

Applying for Credit Insurance is very simple. Enter your details below or call 0161 8211478 to speak with one of our specialists.

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