The Importance Of Credit Insurance

All companies are faced with the dilemma of giving or not giving credit to our customers. The truth is that if we do not grant credit to our customers, companies have very little chance of surviving.

When you buy a credit insurance you can have the peace of mind that you are taking care of your company against the possible risk of default. A good credit insurance will work on those threats or insecurities that the companies exhibit by exchanging their assets on credit. In this way they look in favor of the insured. That yes, whenever situations of insolvency of the debtors arise.

It is hardly natural that the Financial Directors worry about protecting their most valuable assets within the company, no CFO would leave without insurance neither the properties, nor the equipment or the machinery.

And it is that, at the time of an accident, the impact of the business would be very significant. But the credit insurance also takes care of one of the most important assets of the companies. That on average, they represent 40% of the total; Accounts Receivable.


How will a credit insurance help your company?

How will a credit insurance help your company?

Any credit insurance will take care of the following aspects:

  • The prevention regarding the risk of default.
  • It will help your commercial development.
  • Increase your sales in a safe way, protecting yourself from default in any part of the world.
  • It allows you to have detailed information on the evolution of the credit quality of your current and potential customers at all times, so you can accept new orders with peace of mind.

In short, there are many advantages you can get by taking out adequate credit insurance. But the most important thing is that it allows you to have access to bank financing and that you can access your request and the right to compensation. For this there are insurances that can propose formulas that adapt to your needs.


Credit insurance for export companies

Credit insurance for export companies

Credit insurance is very important for foreign trade operations.

Before concluding operations it is recommended to seek a risk coverage through an export credit insurance. Basically because exports are conditioned by a series of risks that are not always analyzed. And that are fundamental.

One of the most common risks, for example, is selling products and services abroad. In this case, depending on where the buyer is located, there will be some commercial risk, a country risk or a currency risk.


Do you understand how each of these risks impacts?

credit loan

  • Commercial risk refers to the success of exports . That is, consider the possibility of carrying out transactions and that there are disputes related to defaults or actions that do not allow the operations to be concluded properly.
  • The country risk considers the conditions of the country of destination . These include aspects such as legal security and different regulations, for example.
  • E l exchange risk refers to fluctuations in the currency which is carried out payment with respect to yours.

One of the benefits of credit insurance that most influences exporting companies is that they provide coverage against possible defaults. And not only that, but they carry out solvency analysis of foreign clients.

For this reason, it is fundamental to contract a credit insurance that provides a high coverage of default risks. And that, in addition, work the effective recovery and provide a fast and flexible compensation.

If you have any questions write us or contact us. At SL Finance we advise you and accompany you in the hiring of any type of deposit or insurance that you request.