Accounts receivable insurance is a risk transfer tool that protects the insured's accounts receivable from loss as a result of:
- Insolvency of a buyer.
- Payment default by a buyer.
- Repudiation (non acceptance) of goods placed at the buyer's disposal.
- Currency inconvertibility.
- Cancellation of export or import permits.
- War or civil unrest in foreign markets.
Benefits of Using Accounts Receivable Insurance To Grow and Strengthen Your Business Include:
- Protecting your company’s most liquid non cash asset from loss due to bad debt. Review your company’s balance sheet and you will see every tangible asset with one exception-your Accounts Receivable-is insured.
- Enhance your borrowing capability, as financial institutions will lend more against insured accounts receivable (up to 90%).
- Grow your top line by selling more to existing buyers or selling into developing markets that you would otherwise consider too risky.
- Give yourself a competitive advantage in a very competitive global market place by offering existing buyers or prospective buyers more liberal payment terms.
- Enhance your access to much needed working capital by pledging or selling your credit-enhanced receivables to a bank or other financial intermediary.
- Free up your limited capital for more productive uses.
- Improve your cost of capital.
- Provides another set of eyes validating your buyers’ creditworthiness which offers peace of mind for owners and/or the board of director’s.
These benefits all enhance the profitability and growth of your business!