Which Businesses Need Credit Insurance

Trading internationally can be very lucrative, but it also presents unprecedented risks, from missed payments to customer insolvency and credit risks. These risks can weaken your business’s investment and operational capacity. Taking credit insurance can help mitigate these risks and protect your cash flow. It also gives you peace of mind knowing you’re financially covered against bad debts.

But the big question remains: is credit insurance suitable for your business? Read on to learn more about this credit management tool and how it can protect your business from non-payment of commercial debt.

Does Your Business Need Trade Credit Insurance?

Your business may require trade credit insurance if:

  1. You Extend Credit to Customers
    If your business sells goods and services on credit terms, either Net 30 days or Net 60 days, you should know that there is a chance that your customers may not pay in time due to insolvency or bankruptcy. You can protect your company against this risk by getting trade credit insurance.
    It’s safe to say that credit insurance is important to any business that gives credit to customers. If a customer fails to pay according to the agreed terms, your insurance broker will reimburse you for your loss.
  2. You’ve Had Issues with Corporate Debt Collection Services in the Past
    Navigating the corporate world when you don’t have business insurance can be challenging. If someone defaults on their payments or a company goes bankrupt, you risk losing your money. Sometimes even hiring a corporate debt collection agency won’t help.
    You transfer this burden to your insurance broker when you purchase trade credit insurance. This gives you the assurance that you’ll be compensated for what you’re owed and that your business operations won’t be interrupted.
  3. You Need to Protect Your Accounts Receivable
    You may also want to purchase trade credit insurance to protect your credit portfolio. This is an excellent way of protecting your business from customers who may default on their payments.
  4. Your Business Operates In Countries with Political Risks
    Trade credit insurance protects your business in the event of political hurdles, such as civil war, regulatory changes, banking and monetary issues, and other political problems that can make your customers not clear their debt.
  5. Your Extend Large Credit Limits
    Maintaining adequate working capital is vital, especially if you work with large enterprises and extend large credit limits. Credit insurance serves as a safety net to protect your cash flow and operating capital should customers fail to pay.

How Niche Trade Credit Can Help

Niche Trade Credit is one of the leading credit insurance brokers in Australia. We specialise in providing credit insurance coverage to businesses of all types so that they can trade globally with confidence.
If you’re interested in learning more or purchasing trade credit insurance for your small company, Niche Trade Credit is the insurance broker to contact in Australia. Call us at 02 8416 0670 for further details.

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