Top 5 Benefits Of Trade Credit Insurance For SMEs

October 18, 2019

Top 5 Benefits Of Trade Credit Insurance For SMEs | Niche Trade Credit Sydney

Wondering why trade credit insurance is so important for small business owners? In this article, Niche Trade Credit will take a look at just a few of the benefits that this type of insurance can have for small businesses – from better credit management to protecting you from bad debt and more. Read on, and see how trade credit insurance can help you grow your business, minimize credit risk and give you peace of mind. 

  1. Protect Your Cash Flow & Your Business

Most small business owners do not have a lot of spare cash – most of your money likely is being re-invested in your business, and is being used to help your company grow.

That means a cash flow interruption – such as when a customer fails to pay a major invoice – can be seriously damaging to your company.

Even just a few bad debts in your accounts receivable can interfere with your ability to grow your business – and could even put its future in jeopardy unless you can secure additional funding for day-to-day operations until the debt is recovered.

This is not a concern with trade credit insurance. Should a customer fail to pay, the insurance company will pay out – and you can continue to run your company normally, without worrying about the negative impact of unpaid invoices on your cash flow. 

  1. Extend Better Credit Limits And Terms

You can offer more generous credit limits and terms if your trade receivables & cash flow are protected by trade credit insurance. This can help you compete with larger companies who may offer large credit limits of hundreds of thousands of dollars, and 60-90 day net payment terms.

  1. Expand Your Business To Developing Countries

The political risks of working in a developing country are mostly mitigated by trade credit insurance. You can even bundle this product with political risk insurance as part of your risk management strategy – which will make it even safer to do business in new countries. 

  1. Avoid Costly Debt Collection Services & Legal Fees

Debt collection is expensive and often ineffective, and legal fees can add up if you sue a company for its unpaid invoices. With trade credit insurance, you don’t have to concern yourself with legal action or debt collection. 

If a customer fails to pay, your insurer will simply pay you according to your policy, and then it will be their responsibility to attempt to collect unpaid debt. It’s just that simple.

  1. Get Peace Of Mind Knowing Your Business Is Protected  

Above all, trade credit insurance for SMEs gives you peace of mind. You’ll know that, even in the event that multiple clients default, or political turmoil impacts your business, you will be protected, and your business can continue to survive – and thrive! For that reason alone, it’s worth investing in a trade credit insurance policy.

Want To Learn More About Trade Credit Insurance For SMEs? Contact Us Now!

At Niche Trade Credit, we’ve been in the insurance industry for more than 30 years, and we specialise in trade credit insurance and political risk insurance in Australia. If you’re the owner of an Australia SME, and you are interested in learning more about how to protect your company, contact us now. 

As experienced insurance brokers in Australia, we can help you understand the benefits of trade credit insurance – and whether or not it’s right for your company. Get in touch today on 02 9416 0670.

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