Bad debts can always be a threat for many businesses, particularly during this economically difficult period. Yet many businesses do not bother so much about the danger of debt, and happily go for insurance against certain hazards like fire and flood.
On the contrary these days, it is much more possible that your debtor may go broke before your building gets fire. If in your business you can sell goods on credit terms, then it is more important to buy trade credit insurance through a trustworthy broker like Niche Trade Credit who is in this business for more than the last 30 years.
Recent data also shows that these days credit insurance claims are going at their highest levels.
As your business will grow, you are likely to expand your trading overseas and also within your own country, probably you are becoming a trade creditor. But this kind of corporate move is full of risks of its own.
Since other companies also accrue unpaid debts against your company, hence you must seriously consider credit insurance to mitigate your concerns and also business risks that you are likely to take very soon.
What are the biggest benefits?
The most noteworthy benefits of this kind of cover will include:
- Potential losses reduced
You can reduce significantly your losses due to unforeseen events because now there is a safety net available that protects against any domestic or international cases of non-payment.
You can also weigh this against the cost of premiums that are calculated based on your turnover and risk. Hence, it can be a smart deal that also offers peace of mind.
2. Improvements in sales growth
Now, you can easily expand your business without any worries of trade debt repayment.
You can also extend credit lines to all your worthy customers and also change the terms to your new credit account holders if you like. In this way, you can create a more competitive market for you.
3. Increased access to your working capital
Different cash flow problems that often you may face otherwise without insurance would be now solved, as the accounts receivable will be covered by insurance.
Also, this is important to your financiers, as your lenders are more comfortable working with such companies that have insurance because it will reduce their own risk while offering loans.
4. Managed credit risk
Also, your insurance provider may help you mitigate your risk and act as your business advisor and help you to make appropriate business decisions to totally avoid losses, and help you to take advantage of all available intelligence.
This will also help you to avoid any negative impacts that might affect your company and you can pick out warning signs much in advance that could put you into trouble.
5. Lowered bad debt reserve
One more benefit of such insurance is your debt recovery service and your ability to write off debts. This will improve your net earnings, and place your company on a better footing.
So, by looking at the above, it will surely help you to decide whether you should go for credit insurance.