Most businesses operate these days by offering their various products and services on certain credit terms. As a result, a significant portion of the working capital remains held as accounts receivable, which can potentially put the cash flow at risk.
By using trade credit insurance, you can keep your business protected against insolvency or non-payment from customers due to any reason. Niche Trade Credit is one of the trustworthy brokers in Australia who has more than 30 years of experience who can help you to buy this insurance.
Trade credit insurance can offer protection against:
- Political risks
You can use this credit insurance as your risk management tool and protect your business. There can often be a certain risk due to unexpected losses due to the failure of any significant debtors that can often be devastating to any business.
If you have a policy of trade credit insurance policy then it can ensure that your business can successfully continue to operate despite any failure on the part of your clients or debtors to make payments.
There are several benefits of this credit insurance policy:
- Cash flow relief
It will protect your business against any kind of fluctuations in your cash flow particularly due to bad debts and any unpaid invoices due to any unforeseen reasons.
2. Sales growth
This will help to expand your business and help you to grow without any hick-ups. It can help you to enhance your credit lines with your present customers.
3. Penetrate into new markets
To sell on credit may always be too risky, especially if you are penetrating into the overseas market. With such trade credit insurance, it will be easier to get into foreign markets.
4. Obtain the detailed information on your existing and new buyers
If you want to assess the creditworthiness of your customers, then through credit insurers you can easily get such data as they continuously monitor various customers’ debtors.
5. Get Early Warning Signs
With the help of such a policy, you can identify any early warning signs of possible payment difficulties.
6. Negotiate better rates from the lender
A Credit Insurance policy will help you gaining access to more finance and increase the amount to borrow. Also, you can demand a better interest rate and the lender will see less risk to lend you.
7. Reduces bad debt provision
A credit insurance policy will allow you to keep some of your cash free that you would have kept aside for covering any bad debt as your policy will now cover you.
8. Decreases credit management costs
Having credit Insurance will help you to make better decisions faster, and ultimately improve your efficiency that will ultimately reflect in your profitability.
9. Helps to avoid any unforeseen impact on your business
Any kind of unexpected insolvency of any of your major customers can make a substantial impact upon your total business operations. A credit insurance policy will help you to identify early warning signs of any potential payment difficulties.