How Purchasing Insurance for Credit May Be a Good Idea for Your Business
Offering credit to your customers is a smart way of doing business. After all, they usually end up purchasing more that way. However, there is always the customer may default and not pay for their purchases. This is where credit insurance comes into play. Here are some benefits of using this type of insurance to help protect your business.
Preventing Risky Transactions
These types of insurance companies have vast networks of databases that can alert you as to when the creditworthiness of each of your customer’s changes. In this way, you can avoid extending credit to those who may be in the beginning stages of default with other companies. You can focus on customers who have a better track record of paying their bills.
Cash Flow Improvement
All businesses need access to the best cash flow they can manage. If your customers are not paying you on time or even not paying you at all, this puts your business at a disadvantage. By purchasing credit insurance, you can protect yourself from others not paying you on time by covering the lost cash flow with your insurance claims.
Better Supplier Terms
If your suppliers know you are carrying this type of insurance, they know they will not be stiffed by you not paying them. Many companies have reported suppliers actually giving them more favorable terms because of this knowledge.
If you are interested in purchasing this type of insurance for you and your business, contact the Trade Risk Group.