Okay, that might sound a bit harsh, but that’s how a lot of business owners view the insurance policies they must have to conduct business. As “necessary evils.”
General Liability. Property Insurance. Worker’s Comp. Life Insurance. Etc, etc, etc….
These types of Insurance Policies are perceived negatively by most businesses. That’s because business owners spend a lot of money every month/year on products they perceive as having no value. There’s no return on investment, because 99.999% of the time they never use the policy they’re paying all kinds of money for—money that, frankly, could be put to good use elsewhere.
Of course, when something does go wrong, that same business owner is thankful they had an insurance policy in place.
Trade Credit Insurance, or Accounts Receivable Insurance, is different. Way different. It can do so many things above and beyond what traditional insurance policies can offer. Below are just 6 reasons why small-business owners consider trade credit insurance one of the best business management tools.
- Sales expansion. If receivables are insured, a company can safely sell more to existing customers or go after new customers that may have been considered too risky without insurance. Simply put, trade credit insurance reduces the risk of entering new markets.
- Expansion into new international markets. A lot of small business owners want to expand into emerging foreign markets but fear the risks involved and potentially volatile global economies. Trade Credit Insurance can help small business with their import/export needs by leveling the playing field with foreign competition, and protecting their liquid assets from global economies they aren’t as familiar with.
- Better financing terms. If your Receivables are insured, banks may be more likely to offer you loans and short-term capital with better terms. Having access like this may provide cost advantages, while allowing you to get the money you need to grow your business. Simply put, banks like customers with minimal risk, like the kind trade credit insurance can offer.
- Reduce bad-debt reserves. Bad debt can zap a company of much needed cash flow. Having a trade credit insurance policy in place frees up cash for the company. Also, trade credit insurance premiums are tax deductible, but bad debt reserves are not.
- Indemnification from a customer’s non-payment. On its most basic level, Trade Credit Insurance protects you from customers who don’t pay your bills due to bankruptcy or insolvency. Filing a claim against a non-paying account ensures cash flow.
Got questions about Credit Insurance or want more information? Contact us at 610-323-6716 or email@example.com.