Benefits of using Credit Insurance:
-Allows you to trade in the knowledge that if you don't get paid then there is someone to bail you out and protect your cash flow.
-Allows you to evaluate the risk of taking on new contracts and continually monitors these risks for future problems.
-Allows you to sell more to existing companies by identifying the good risks.
-Can be used as security against lending facilities which may in turn allow you to negotiate a better borrowing rate or extend your current agreement
-Helps improve cash flow.
-Usually more cost effective and simpler than raising Letters of Credit
-Credit insurance provides a definable cost on which you can budget and irons out the peaks where you have bad debts as opposed to the bad debt coming straight off your bottom line. -Companies that credit insure have less bad debts than those that don't.
-To recuperate a bad debt of £10,000 you will need to make at least another £100,000 in additional sales where your margins are 10%
-Protects your profit, your balance sheet and your companies future.
-Ability to access a range of credit management services, e.g. some insurers offer free credit opinions and a free debt collection service.
-Allows you to reduce your bad debt provision, thus releasing tied up capital.
And the reason most take it out - Allows you to sleep at night.
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