Trade Credit Insurance – Any Sale Carries Risk

With every sale, there is a chance the buyer will not pay and non-payment can be damaging, or even catastrophic, to a seller.

One or two bad debts can wipe out profits for the year. 

The unexpected can happen. 

Want to mitigate this risk?

How do companies manage bad debt risk? 

Self-insurance 

Companies earmark cash for bad debt reserves.  
However, self-insurance fails to protect against very large, unexpected losses and negatively impacts cash flow and the balance sheet.
Companies that tie up capital with self-insurance hamper their ability to invest in growth opportunities and often become very conservative, especially in international markets.  
These companies also must take on the total responsibility for evaluating the creditworthiness of customers. 

Bank/Invoice Finance provider Bad Debt Protection 

There is a significant cost. 
When collection of debt is turned over to an aggressive third party, companies risk alienating customers. 

Letters of Credit* and Payment in Advance 

These normally apply to international sales. Unfortunately… 

…they limit the amount buyers can or will buy. 
…they are expensive. 
…they generally have to be set up on a transaction-by-transaction basis. 

 Trade Credit Insurance 

Though there is a modest cost, trade credit insurance has many advantages 

Analysis of the viability and financial stability of a potential customer 
Bridge the gap between the sales and credit departments 
Assist with streamlining the accounts receivables and collections departments 
Cover Losses while selling on Consignment Stock 
Cover Losses Due to Political Risk 
Covers Losses that occur before goods are invoiced 

Trade credit insurance provides protection against unforeseen losses that even the best credit departments can’t see coming. 

Our Trade Credit Specialist

Maggie Brotherson has worked within Trade Credit for 30 years, a specialist within her area she has a clear and determined passion for doing the best for businesses. Trade Credit Insurance provides businesses with protection against failure and substantial delays in receiving payments.  What may seem catastrophic at first is bearable with a policy structured to fit your business requirements.

Contact Maggie for any Trade Credit enquiries on 07497 199 978 or email her at maggie.brotherson@konsileo.com