What Is Structured Trade Credit Insurance

Structured trade credit insurance protects your business from financial loss due to credit default risks, such as political risks and customer non-payment, bankruptcy, or insolvency. It helps you to secure trade contracts quickly and confidently while protecting against potential risks.

How Does Structured Trade Credit Insurance Work?

Structured trade credit insurance works by shielding your business if buyers who owe you money for goods fail to pay their debts or make late payments. It covers the customers’ debt, allowing your business to continue trading without worrying about the risk of not being paid. With this type of insurance, you can give credit to new customers and expand your funding options.

The insurance provides complete coverage for your accounts receivables, which can protect your cash flow and working capital. This helps you avoid unexpected disturbances to your cash flow and allows you to pay your salaries, overheads, and bank debts on time.

Why Should You Take Structured Trade Credit Insurance?

Once you take structured trade credit insurance, you can continue focusing on expanding your business without having to worry about financial loss. This coverage gives you peace of mind knowing that all your invoices are covered and that any financial loss that may occur will be compensated by insurance. Other benefits include:

  • Protection – Structured trade credit insurance protects your business by covering any financial losses your business may suffer due to insolvency, economic crises, or non-payments from customers. This helps prevent fluctuations in cash flow, which can help maintain a healthy business.
  • Enter new markets – Extending credit can be challenging for any business, no matter the size. This is particularly the case if you are operating internationally. But with insurance, penetrating new markets and growing your reach is pretty easy. The insurance also gives you the ability to extend credit to new and existing customers, allowing your business to operate smoothly.
  • Risk management – This type of insurance can help you manage your credit risk by limiting the impact of customer insolvency and minimising the cost of bad debt. This provides peace of mind because you know you will be compensated for unpaid invoices.
  • Cash Flow Relief – Structured trade credit insurance can boost your company’s cash flow by providing more financial stability. In addition, it offers advance payment on overdue invoices, which you can use to cover your day-to-day financial obligations. Not only will this maximise your profitability, but it can also help your business to remain competitive in the market.

How can Niche Trade Credit Help?

At Niche Trade Credit, our agents are experts in all aspects of trade credit insurance. We arrange insurance coverage against the risk of non-payment for businesses, investors, and financial institutions. We also offer debt collection and recovery services.

As one of the leading credit insurance brokers in Australia with over 30 years of experience, we can help you design comprehensive coverage that meets your business needs. Ready to get started? Call us at 02 9416 0670 to get a free credit risk assessment.

Also see: What are the different types of trade credit insurance policies? 

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