PolyQuest expanded its North American operations into Europe in September 2020. With that came a new set of rules and regulations, and PolyQuest faced unfamiliar credit risks, such as a different cash conversion cycle that required extended payment terms to customers. On top of that, banks in the EU often won’t lend against a customer’s receivables unless the receivables are insured.
Allianz Trade, the world’s leading trade credit insurer, is headquartered in Europe, where it has an established reputation and deep knowledge of European markets. PolyQuest quickly and easily expanded its existing North American policy to include export sales. “Allianz Trade has been extremely important in allowing us to grow via borrowing from the bank in our ABL [asset-based lending] arrangement in Europe,” says Moran.
Trade credit insurance also provides PolyQuest a comfort level for Europe’s longer terms of sale and confidence when developing relationships with new clients. Extended payment terms help PolyQuest help its customers, while trade credit insurance “allows PolyQuest some more time to build comfort with new customers and their ability to pay us over time,” says Tod Durst, President and Co-Owner of PolyQuest.
Not Enough Financial Data Insight
PolyQuest has customers across a variety of industries, which creates quite the learning curve when it comes to financial health and data. In 2020, the COVID-19 pandemic further impacted data insight, restricting the face-to-face time PolyQuest’s commercial team usually spends with customers.
PolyQuest relies on Allianz Trade’ financial data insight to not only help the commercial team vet new leads and stay informed of industry trends but also make quick sales—a notable benefit in a low-margin industry.
Allianz Trade’ financial intelligence, market analysis, and trade credit protection give PolyQuest the confidence to be forward-thinking, not bureaucratic, when it comes to gaining new customers. PolyQuest doesn’t have to hold up a sale to do a thorough examination from afar. Instead, it can get short-term protection fast to make the sale.
“It’s a lot easier to ask for coverage from Allianz Trade,” says Moran. “If it gets approved, we’re already hedging our risk.” Meanwhile, the commercial team has time to do its due diligence.
“It’s a daily challenge to get good financial guidance and data that we can pass along to the commercial team to ensure they’re making informed decisions,” says Moran. “But with COVID over the past year and as we grow, we know our customers, especially new customers, a little less. That’s where Allianz Trade has helped the most.”