While invoice financing is one way to avoid cash flow issues, trade credit insurance remains the most reliable way to deal with trade credit risk and avoid cash flow issues.
Trade credit insurance helps you assess the creditworthiness of your customers and therefore help you decide which ones you can safely do business with, without being limited to only one transaction.
The trade credit insurer defines a credit limit for each customer corresponding to the maximum recommended trading amount. You are covered for this amount and receive compensation quickly in the event of a bad debt.
A trade credit insurance policy also gives peace of mind to your finance partners. Your bankers and other lenders (including those providing invoice financing!) can be reassured about the financial stability of your company, and more inclined to guarantee financing.
All this supports your working capital ratio, lifts uncertainty regarding your cash flow, and secures your company’s ability to grow.
As a global leader in trade credit insurance, Allianz Trade provides world-class knowledge and data to empower your trading decisions. We offer extensive economic and business risk resources thanks to our teams of experts around the world.Find us in your country to learn more or contact us.