What is credit insurance and how does it protect your business?

Posted on 17 Feb 2016 by The Manufacturer

Mark Brundage, president of US-based Global Financial Corp, takes a look a the often overlooked but incredibly important topic of credit insurance.

Over my 25 years in commercial finance, I have witnessed great companies struck down overnight because a key part of their business was missing protection. Business owners would never contemplate going without insurance to protect property and equipment. However, when it comes to credit insurance, most business owners do not insure one of their largest assets, their accounts receivables.

A business without credit insurance coverage can quickly find its operation on the verge of collapse when a customer unexpectedly files for bankruptcy. Few businesses know about this valuable protection.

Here are some of the benefits:

  • Gain access to high level information, including insurer’s knowledge and credit information, to make informed decisions about credit worthiness instead of making gut assessments.
  • Approve new credit systematically and quickly with exact precision.
  • Establish safe large credit limits that will be covered immediately, even for new customers, allowing for rapid safe expansion and new profits.
  • Gain a larger share of business with existing clients by safely raising their credit limits, instantly increasing revenue safely.
  • Mitigate the concentrated A/R risk scenario in which one large account that fails wipes out years of profit or worse.

With credit insurance coverage in place, your business can extend credit quickly and safely to customers you might have previously passed on or been unwilling to extend credit due to an inability to assess risk.  In addition, your business has the added security of knowing the payment are guaranteed, further minimizing the level of risk.

Be sure to work with a lender that is knowledgeable in how to process claims under credit insurance policies to ensure that proper payouts occur when events happen.

When combined with a large line of credit, this insurance coverage allows the business to grow safely and rapidly.  At Global Financial Corp, we can help you with up to $25,000,000+ interest only lines and inventory lines, from A+ to D- credits and financials and advise you on accessing credit insurance. Reserve your FREE consultation to uncover more instantly.