Planning for growth this year? Growth is an important, if not indispensable, part of any company’s playbook. Part of the planning around growth should include the increased risks that come along with it. Accounts receivable are among a company’s largest assets and will typically grow as a company grows. While they may be one of, if not the, most valuable asset on the balance sheet and often the most vulnerable to a loss, they’re often neglected when it comes to risk protection.
Did you know you can use Credit Insurance to grow your top line business while proactively safeguarding against losses to the bottom line?
Are you limiting your customer’s orders? Turning away potential sales? Grow your sales by making it easier for your customers to purchase larger quantities or get extended terms, and for new customers to establish credit terms with you. Ship larger orders and you may be able to negotiate better pricing from suppliers, make longer manufacturing runs, and transfer inventory carrying costs.
Do your competitors have an advantage over you? Are there new markets and customers you can reach if you could just give terms safely? Sell to customers that previously wouldn’t buy from you on COD or Letter of Credit. Open new markets which your company might otherwise perceive as too risky for extending credit terms. The opportunity to establish market share in emerging industries has never been greater.
Can your Distributor network move more product if you could give them more? Negotiate stronger representation by offering competitive terms to your distributors. Provide incentives to keep more of your products in the supply chain.
Looking for more money from the bank? Obtain more favorable terms by including more receivables in your borrowing base, get credit for Export Receivables, get a higher cap on any concentrations, aged receivables or cross age issues you might have. Credit Insurance can make receivables more attractive to your bank or other lenders.
What would a catastrophic credit loss really mean to your company? How many years would you have to work to just get back to even? Two? Three? Keep your company’s financial position secure, despite exposure to unforeseen events, concentrations of credit risks, and changing market conditions. Remove the guess work of bad debt reserves. Guarantee your bad debt year-in and year-out. And expense the cost.
Traditionally, Credit Insurance was thought to be for companies with foreign accounts receivable or an exceptionally bad historical loss record. Not True. Many companies who only trade domestically insure all or part of their receivables. With Credit Insurance a company never has to worry about having a bad loss history as a part of its legacy.
Credit Insurance and Political Risk Insurance protect companies from:
For an assessment of your risk and to find out if Credit Insurance coverage is right for your business, please contact:
Vice President, Alper Services LLC
Director, Alper Global Trade Risk Management