Bad Debt Protection
How well do you really know your customers and suppliers, and just as importantly, how creditworthy are your new business targets? Bad debt protection (BDP) can help give you the answers, and protect your business from bad debt. Designed to meet the needs of most companies, it provides all the checks, opinions and advice you’ll ever need.
How credit insurance can protect your business?
Credit insurance safeguards your business against the failure of a customer to pay their debts. It may be as a result of your customer becoming insolvent, or because they fail to pay within the agreed credit period resulting in a bad debt. This can have a serious impact on your cashflow and, if it does result in a loss, then it could be very damaging to your business and supplier relationships. As standard, BDP covers goods or services sold and delivered – but it can be tailored to cover many other risks, such as work in progress and binding contracts.
Credit Insurance covers you nationally and internationally
It allows companies that export to protect themselves against a range of ‘political’ risks (as well as the buyer risks) which may prevent or delay payment. Examples include: war or civil war in your customer’s country, cancellation of the contract by the government of your customer’s country, or governmental regulations such as embargo or quotas that prevent the export or import of goods.
What are the other benefits to credit insurance?
- Improved cash flow – assisting you in the collection of your overdue accounts, the credit insurance company will chase bad debts on your behalf thereby providing a speedy and successful way for you to collect money owed to your business.
- Helping you to secure trade finance – banks and trade finance comapnies are often more willing to provide trade finance, or more favourable lending terms to businesses with credit insurance.
- Improved trading terms with your suppliers – helps you to negotiate more favourable terms with your suppliers if they know you have taken the steps to protect your assets and balance sheet.
- Less risk, greater peace of mind – credit insurance gives you the reassurance that if one of your insured buyers can’t or won’t pay, then the credit insurer will.
How affordable is credit insurance?
The cost is directly linked to the risk to which your business is exposed – and is related to the amount of turnover that you wish to insure. It also varies according to the nature of your customers and where they are located, the trade sector in which you operate, and the track record of your own business in credit management.
The best way to get a more definitive answer in your own particular case is to contact us to discuss the options.
Bear in mind, the real question is this: in a very uncertain world, can you afford to take the risk of being without credit protection?