Trade higher with trade credit insurance

By Andrew Smith, Client Director

How would your business use trade credit insurance? Some use this product purely as a way to protect their business against potential non-payment of invoices for the goods or services they’re selling on credit. This is, after all, its primary use. However, your trade credit insurance could do much more for your business than that.

With the number of businesses going bust hitting a 30 year high in 2023, it’s more important than ever for businesses to feel confident when they trade. And as we mentioned in our article explaining trade credit insurance, this product can help you engage in credit sales, foster growth and gain stability in an unpredictable business environment. Here are just a few of the ways it can help:

Insights to make decisions driven by intelligence

When you have trade credit insurance with us, you’ll get access to useful insights that can help you gain a competitive edge – such as customer financial analysis, sector intelligence and insolvency statistic evaluations. 

Simply check this information to find which companies have a good reputation before agreeing to new contracts or payment terms. It can also help you identify if certain potential customers may be poor payers, so you can choose whether or not to act on an approach from an unknown customer. Knowledge really is power.

Of course, access to this information also helps take the pressure off your team. It reduces their need to spend so much time checking a company’s credit status, giving them more time to focus on other business-critical tasks. 
 

Gives you confidence to grow faster

Late payments or unpaid invoices can have a substantial impact on your capital so, if you don’t know that you’ll be paid in a timely manner for your goods or services, you may not want to risk providing a huge amount of them on credit. At least not until your team has taken the time to assess them. Trade credit insurance removes some of these concerns.
With the reassurance and the insights that trade credit insurance provides, you can break into new global markets, plus take on new customers at home more quickly and grow your business with them faster. All because you know that if they default on their payment, your trade credit insurance will help. 

Positive for financial providers and your suppliers

If a bank knows you have trade credit insurance, they can take this into consideration when assessing your funding requirements. This could result in a successful lending application or improved terms for funding because they know that your invoices won’t go completely unpaid if a customer doesn’t pay up. 

And it can be reassuring for your suppliers too. If you’re not paid by your customers and you don’t have trade credit insurance, this can have a knock-on effect for your suppliers’ cashflow. But if you can provide reassurance to suppliers that you have this insurance, you may be able to negotiate better terms with them.
 

Creates stability in uncertain times

Economic and political factors can affect the stability of companies, as we’ve seen in recent times with energy price changes and supply chain difficulties. As we mentioned in a recent article about the increasing number of insolvencies trade credit insurance helps companies navigate these uncertainties by covering risks associated with political events, currency fluctuations, and other unforeseen circumstances that might lead to non-payment. This can support stability and help to mitigate some financial risk when the wider picture is uncertain.

Give your business a boost

As you can see, from bringing stability to providing valuable insights, trade credit insurance really can help you take your business to the next level. 

To talk about what trade credit insurance could mean for your business, simple chat to a Howden expert today on 0121 452 8707.