Trade credit insurance policy protects your company's cash flow and liquidity by simply covering your losses in case of consumer insolvency or protracted default. If your debtor becomes bankrupt, trade credit insurance reassures you your gains are guarded.
Any company which provides credit conditions on the products and services that they market is exposed to bad debt. This can interrupt your cash flow and leave you out of pocket. A trade credit insurance coverage will protect your company from a loss that you might not ever recover from.
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What are the principal advantages of credit?
-With trade credit, you've got peace of mind that you are protected against bad debts so that you can concentrate on running your business instead of worrying about your account receivable.
-Smart small companies cover other significant assets such as buildings and equipment — you need to safeguard your debtor's ledger in precisely the same manner.
-Whether your clients are local or global, it is not possible to completely know their fiscal situation. Trade credit insurance provides yet another layer to your credit management strategy, giving your business assurance that you are protected.
-Boost your borrowing ability.
-Most banks handle trade credit as security protection when providing funding for national or global earnings, giving you longer borrowing ability to fund growth.