How can a credit insurance help your business?
A credit insurance provides financial security, an optimal cash flow and therefore secures the ambition to grow. There are several organizations, markets and business operations. Therefore, there are several credit insurances. Although the mutual advantages can differ, the general and most important advantages are the same.
On this page, we explain the decisive advantages according to our years of experience, and the experiences of our clients. A credit insurance can do the same for you as the below-mentioned advantages of which our clients can profit. Are you not sure about what a credit insurance is?
The first part of a credit insurance is the checking of the creditworthiness of current as well as new debtors. Therefore, the organization is able to anticipate on this and to adjust the payment policy of the debtors. Because of the creditworthiness check, focus can be put on the creditworthy debtors. The second step of a credit insurance is the collection system, which is part of the coverage of the policy. The organization as well as the credit insurers profit from a successful payment. The third step is the full coverage of risks a credit insurance offers.
What can a credit insurance do for you and your company? Below, you can find the most important advantages of a credit insurance.
Insurance against default; the most important reason for taking out a credit insurance is that the organization is protected against non-payment through the insurance. Outstanding invoices are paid out by the credit insurance according to the policy terms.
The collection system; the entire collection system is, provided this is taken out, covered by the policy coverage of the credit insurance. Unneccesary costs for collection that normally come up to keep the cash flow healthy, are avoided when taking out the credit insurance.
Increase of the financial options; when taking out a credit insurance, the financing options will increase. When the chance of non-payment is omitted, banks are more likely to extend credit, as the risk is simply lower.
Optimal financial flow; the average duration of the debtors paying for outstanding invoices will decrease because of the professional collection system. Because these outstanding invoices are paid faster, the financial flow is optimized, which increases the liquidity benefits
Stimulating safe growth; a credit insurance stimulates safe and secure growth. New debtors are checked for their creditworthiness in an early stage, which enables the company to fully focus on the credit worthy debtors. Using this up-to-date information, the company can provide a substantiated prognoses for safe revenue growth.
Increasing competitive advantage; the payment policy could be made more flexible when debtors are declared credit worthy. This can improve sustainable customer relations and creates competitive advantage. Moreover, by decreasing the DSO (Days Sales Outstanding), the liquidity benefits increase which improves the working capital and consequently increases the competitive advantage.
In-home expertise; the CreditInsurers profit from paying out as little as possible. The credit insurer will, together with you, ensure you are assured of your revenue. Offering expertise enables you to achieve your revenues while insurers have to pay less. This is what we call a win-win situation.
Less concerns; carefree undertaking is badly measurable, yet very important for entrepreneurship. Worrying about a successful payment system, sending reminders or thinking about outstanding invoices are in the past. The coverage of the credit insurance will take control over these aspects. Possible financial concerns will be taken away.
Do you find these advantages appealing and do you want to know more about why taking out a credit insurance is recommendable? In a personal consultation free from charge or obligations, we will explain what a credit insurance and specifically The Credit Insurers can do for you and your organization. Contact us for a free consultation.
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