Panaz USA:
Small business protects its bottom line in an unstable economy

Allianz Trade’s depth and breadth of financial insights have proved “absolutely invaluable,” says Logus, “especially during the pandemic.” These insights give Logus the ability to make sound business decisions based on information he otherwise would not have access to.

“We don’t have the depth of financial analysis that Allianz Trade does,” says Logus. “We’re not financial people. We are textile people.”

Logus has used Allianz Trade’s historical data as well as its proactive financial insights to help decide which clients are profitable to work with. Due to the reduced margins and increased timelines in the industry, “you can’t afford to make mistakes,” says Logus.

“When I hear from Allianz Trade that a business has credit reduced, I might tell my sales force, ‘Don’t go visit them. I can’t get credit,’” says Logus. The partnership with Allianz Trade helps him “optimize performance for my team. If I know I can’t get $10,000 in credit, I’m not going to spend the money on sending samples, freight, design fees.”

“Allianz Trade’s up-to-date information can help us quickly pivot away from a non-profitable or non-creditworthy buyer,” says Logus. “That information is absolutely powerful. Allianz Trade keeps me well-informed of any possible problem we might have.”

Panaz USA does big business, but it’s a relatively small company. Logus believes this makes his partnership with Allianz Trade even more valuable since protecting the bottom line is so important. He uses Allianz Trade’s insights to avoid non-payment claims altogether—and the legal burden that can come with them.

During Panaz’s partnership with Allianz Trade, “we’ve filed zero claims,” says Logan. “That’s valuable. A $10,000 claim can hurt a small company like us. It affects this week’s payroll. Allianz Trade protects us.”

Logus points to cruise lines as a timely example. It’s no secret that the industry has been rocked by the pandemic. Logus has seen firsthand that even top clients are not always forthcoming about financial information when they are in trouble.

Recently, Allianz Trade informed Logus that the credit risk of one of his cruise line clients had increased. This contradicted what Logus had been hearing among others in the industry. “The client was going to submit a $10,000 order, and we decided to pull back. We called them, and they said ‘we understand.’” says Logus. “In other words, they wouldn’t have told me that they had a problem, but Allianz Trade protected us.”

In this unstable environment, Logus feels that a no from Allianz Trade is just as valuable as a yes. So far, Panaz has not incurred any losses from cruise lines. “Emails were coming in from Allianz Trade every other day,” says Logus. “They helped me avoid collecting by giving me real-time information on the clients we’re dealing with. Allianz Trade’s sound judgment and honesty helped us avoid claims.”

“It’s really invaluable that I have a company that watches my back,” says Logus. “Normally, I have to watch everybody else’s back. Allianz Trade is watching mine.”

Just as Allianz Trade helps Logus avoid risky clients and costly claims, the partnership also helps Logus invest in stable clients to grow their business.

He points to a client in the industrial technology sector as an example. Their business relationship started with a low six-figure line. “They were giving us more and more business,” says Logus. “So, I called Allianz Trade, and they told me I could increase it by 25 percent. I was able to give them a better product that was a little more expensive.”

The client continued to buy the product, and soon Allianz Trade gave Logus the confidence to bump up the line by another 20 percent. As a result, “the account grew more than 55 percent in billings,” says Logus.

Logus realized that the ability to extend credit to clients strengthened his relationships with them. “We became a valuable vendor to them. And this is a direct result of speaking with Allianz Trade,” says Logus. “Now I frequently use Allianz Trade as a sounding board,” says Logus. “I always get the best financial information, and it allows me to plan a strategy. If a client wants to increase their line and Allianz Trade tells me to go for it, I concentrate my efforts on building that client’s business.”

John Logus remembers the “old days,” when he used to factor all his invoices to mitigate trade credit risk. Trade credit insurance through Allianz Trade “protects us more than factoring,” says Logus.

First, factoring involved “very high” fees, says Logus. Factoring doesn’t typically cover the full value of an invoice, either. And if a factor wasn’t accepted, he didn’t know why. “With Allianz Trade, I have a clear understanding of what’s happening and why,” says Logus.

Lastly, Logus finds Allianz Trade’s customer service to be proactive and timely, something that he never got with factoring. Without prompting, “I get emails from Allianz Trade that say, ‘We’ve analyzed this client and we think we should reduce the credit line,’” says Logus.

“I know some companies still factor invoices,” says Logus, “but it’s just too dynamic of an industry to make a decision based on a parttime employee’s work. Trade credit insurance is Allianz Trade’s full-time responsibility. And its rates are very reasonable.”