Why credit insurance is a vital part of running your business

In this competitive business environment, it’s always a good idea to have insurance protection. Many forms of insurance are available, from regulatory compliance to property and casualty. But why should you consider credit insurance for your company? Here are several reasons why having credit insurance is vital for any business to survive: https://atradius.no/kredittforsikring/

1) Helps reduce cash flow problems

Credit Insurance helps protect a business against bad debts by paying out money if customers don’t pay. The premiums are usually low based on average monthly turnover, so it could be worth looking into. It can free up that much-needed money for your business.

2) Helps protect against bad debts

Credit insurance can cover a business if its customers don’t pay. This can be incredibly useful for small business owners, as it means that cash flow isn’t constricted by an account not being paid on time. A business could then continue trading or at least have some protection in place to ensure business continuity.

3) It is affordable

There are many different types of credit insurance available for businesses, so make sure to shop around. Don’t forget that you are also allowed up to 24 months to pay your premiums, although many providers will ask for payment upfront or within one month of signing up with them. Either way, credit insurance may be surprisingly affordable depending upon your provider.

4) It is great for cash flow

Credit Insurance could mean that you don’t need to wait 30-60 days before your invoices are paid (depending upon their terms). With such an unpredictable economic climate, this could be a lifesaver for many businesses, especially smaller ones who do not have the same level of clout as larger organizations when negotiating with creditors.

5) Another line of revenue

If you’re struggling to find more clients or money coming in, then Credit Protection Insurance can help with that. Many providers will include having the ability to sell on the ‘insurance’ or offer it within another service or product, so it’s another potential revenue stream for your business.

6) Stop bad debt turning into bad cash flow

If one of your customers doesn’t pay you, this can have an adverse effect on the levels of cash available for other costs within the business. Credit Protection Insurance can help restore some of this lost capacity.

7) It’s a good safety net for your business

With all the recent changes to VAT rules, banks are being more cautious about lending money to businesses. (https://atradius.no) This means that many small businesses are finding it even harder to get credit facilities from banks, so automatically opting for credit insurance will help provide cover against bad debts and also gives peace of mind that they’re covered if their customer doesn’t pay them.

Conclusion:

Credit Insurance is a vital part of running your business. Make sure to research and compare different providers and types of trade credit insurance before purchasing any; however, it could be the solution to help protect against bad debts and reduce cash flow problems that businesses are currently facing in today’s economic climate.