What is business credit insurance?
Business credit insurance protects cash flow against the problems often associated with trading on credit by safeguarding your company against bad debts, either through debtor insolvency or protracted default (i.e. non-payment after an extended period).
Whilst bad debt insurance can be provided by credit insurance companies as a standalone product, non-recourse invoice finance facilities incorporate credit protection in addition to releasing cash against the value of your sales ledger within 24 hours of an invoice’s issue.
What are the benefits of business credit insurance?
- Business credit insurance safeguards your cash flow in the event a debtor falls insolvent or takes longer than the agreed credit period to pay an invoice.
- There is a variety of policies available from a range of credit insurance companies that can be tailored to meet your individual requirements.
- Bad debt insurance can either be incorporated into a non-recourse invoice finance facility, or be provided as a standalone product.
- Facilities can provide credit protection against your entire debtor book, or just select customers that may have an adverse credit history.
- In addition to providing domestic cover, business credit insurance can protect against the risk of overseas trade.
What business credit insurance policies are available to my business?
While whole turnover business credit insurance covers your entire debtor book to provide the maximum level of bad debt protection available, selective cover insurance allows you to select which debtors you wish to be insured against to help you trade with customers with an adverse credit history, or to protect your business against a high-value invoice.
Additionally, credit insurance companies can provide international cover, which specialises in providing bad debt insurance against the credit risks associated with trading abroad and sometimes include political risk insurance. Other specialist credit insurance policies are available:
Performance bonds insurance provides assurances that any contracts will be completed on time in the event any contractor or supplier fails to meet their contractual obligations.
Duty-deferment bonds allow the deferral of HM Customs and Excise duty and VAT that must be paid upon importing goods into the UK.
With access to a range of credit insurance companies based domestically and abroad, Hilton-Baird Financial Solutions is proven at identifying business credit insurance policies that meet individual businesses’ requirements as the UK’s leading commercial finance broker.
Please call 0800 9774833 or email info@hiltonbaird.co.uk to find out more about the range of business credit insurance policies available. Alternatively, get an invoice finance quote to see how much cash you could release against unpaid invoices whilst benefiting from bad debt insurance.
Related pages to business credit insurance: