What Are The 5 Benefits Of Trade Credit Insurance?
Trade credit insurance (TCI) is one of the most effective ways to protect your business operations from unseen issues with cash flow, unpaid invoices and bad debts. It helps your business to grow. So, how does trade credit insurance work, and what are its benefits to you and your business?
1. Cash flow Relief - One of the first and most important benefits from a trade credit insurance policy is that it protects your business against fluctuations in cash flow – specifically, those caused by bad debts and unpaid invoices. Unpaid invoices can lead to bankruptcy or insolvency, making it incredibly difficult for a company and its owners to bounce back in the future. With trade credit insurance, businesses have a safety net, thanks to the indemnification of unpaid debts. Therefore, even if a particular customer fails to pay continuously or becomes insolvent, a business will still be able to operate as if they’d been paid, while pursuing the debt through legal or other means.
2. Sales Growth - Trade credit insurance helps your business to expand and grow without any hassles. It helps you to enhance credit lines with your existing customers and ensures that your business continues to operate smoothly despite non-payment by your debtors.
3. Penetrate Into New Markets - Selling on credit is not easy, especially if you’re operating overseas. With trade credit insurance, it is easy to get access into foreign markets. Based on the data provided by the trade credit insurers, businesses can make better business decisions and enter foreign markets.
4. Obtain Detailed Information on Existing and New Buyers - To assess the creditworthiness of customers, credit insurers continuously monitor its customer’s debtors. Coface is a leading credit insurance provider, with 70+ years of experience. It has an extensive database of 200 million companies worldwide. With international database, we can get detailed information on the customer including company history, financial statements and more.
5. Get Early Warning Signs - A trade credit insurance policy can help you in identifying early warning signs of potential payment difficulties. You can check the high risk companies and alert your company to avoid any financial losses. Trade credit insurance therefore makes sure you can run your business with confidence.
How CAN Coface Can Help Your Company Trade Confidently?
We monitor over 200 million companies in Singapore and worldwide so when you partner with “Coface Singapore” you’ll have access to:
- Customer and supplier credit checks on demand
- The latest business and economic trends
- The information you need to make informed credit risk decisions
- The confidence to offer competitive credit terms and win more business