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why-take-out-trade-credit-insurance

Why take out a trade credit insurance ?

Thin margins? Lots of foreign customers? Or just need more financial security? There are several reasons why you should consider credit insurance. On this page you will find the most important ones.

Every company wants to grow. That provides room for investment, keeps staff motivated and gives confidence for the future. Often growth goes hand in hand with new customers or other markets. If you supply on credit, this brings risks. How well do you know your new customers? Has their creditworthiness been checked? And what are the financial consequences for your business if one of your customers goes bankrupt?

Taking out trade credit insurance can provide security for these risks. You may think that for the good and long-time loyal customers, you don't actually need credit insurance. The assumption is that these customers will pay anyway. Yet you have to realize that the payment behavior of companies can suddenly change, even in good economic times. Then it is good to be able to fall back on credit insurance.

Do you want to know whether credit insurance is wise for your company? Read more on this page or contact us.

Coeck chooses extra protection

Coeck is a family business that produces and distributes construction materials. It has offered comprehensive concrete construction solutions since 1929.

One of the challenges Coeck is currently facing is rising commodity prices, but finding the right staff and covering its credit risks are also recurring issues. For the latter, they can count on Allianz Trade’ help if their own procedures are not sufficient.

Finance Director Andy Van Den Vonder talks about the collaboration in the video below.

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What are the advantages of credit insurance?

You may think that getting trade credit insurance is only beneficial for large companies. Or that trade credit insurance is expensive. Both statements are incorrect. You have trade credit insurance in all shapes and sizes. You can insure your entire turnover or just the occasional invoice or project. For SMEs, we offer special solutions with fixed coverage at a fixed rate. So you can make all kinds of choices. These also determine the cost.

The most comprehensive trade credit insurance usually costs less than 0.5% of your company's turnover. You will often quickly recoup this cost of trade credit insurance. Often the cost of writing off your debtors is higher. This simple math is easy to do.

8 reasons to take out trade credit insurance

  1. Better relationship with your clients because you can make more customer-friendly payment arrangements, due to the coverage guarantee from trade credit insurance.
  2. Extra financial room by reducing debtor risks and write-offs.
  3. Access to more knowledge and information about the creditworthiness of your customers and prospects.
  4. Better banking conditions (often at more favourable rates) because insured receivables are translated into secure collateral by banks and lenders.
  5. Competitive terms, including abroad so you can sell (more) in foreign markets.
  6. Secure business abroad with less paperwork and at lower costs.
  7. Additional growth with key clients with maximum secured supply through simple process approval credit limits.
  8. No hassle with debt collection and therefore a good night's sleep knowing your risks are insured and your payments guaranteed.

Trade credit insurance: explained in 5 steps

  1. Risk assessment of your customers and prospects
  2. Checking creditworthiness before you do business
  3. Real-time monitoring of trade and payment risk
  4. Collection of your unpaid invoices
  5. Compensation if your customer does not pay or is insolvent
trade-credit-insurance-explained

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Is taking out trade credit insurance interesting for your business?
Contact us and we will be happy to tell you more about it.