For small and medium-sized enterprises (SMEs) in particular, just one or two unpaid invoices can be devastating. Smaller businesses often rely on fewer customers generating a large percentage of its income. SMEs may also have less cash reserves and tighter profit margins, making it much harder to overcome bad debt. 

Now, more than ever, businesses are facing tough trading conditions. In England and Wales, company insolvencies in 2023 were at the highest for over 30 years. Providing your business with a competitive edge has never been more essential.

What is the solution?

Trade credit insurance is not just for large organisations. In fact, in many cases, SMEs have more opportunities to maximise the benefits.

Trade credit insurance protects your business against bad debts. Whether your customer is paying late, or going insolvent, trade credit insurance can help. It provides a road map to navigate any trading uncertainties, gives you access to invaluable tools and information, and offers an early warning when certain customers might be struggling. 

It can also help a small business be more competitive in their marketplace. Trade credit insurance provides insight into the financial health of your customers, improves your cash flow, and helps you access new funding.  

Do you need Trade Credit Insurance?

Do you offer credit terms to your customers? Would your business benefit from improved cash flow? Do you rely on a small number of key customers? Would delayed or non-payment of an invoice have a negative impact on the finances of your business? 

When a business has solid credit risk management in place, trading on credit terms can offer many competitive advantages. Trade credit insurance is an essential party of your credit risk strategy. 

Here are some signs you might benefit:

  • Customers have paid you late before, or have otherwise indicated cash-flow problems. 
  • Non-payment of certain large invoices would put serious strain on your company. 
  • Your invoice finance agreement includes “bad debt protection”, which is restricting your funding limits. 

What types of Trade Credit Insurance are available?

All businesses are unique, and so is yours. As a result, policies are tailored to suit your specific needs. There are a wide range of options available, from specialised policies that focus on exports to those that concentrate on political risks, and everything in-between. 

Regardless of which sector you operate in, there are a wide variety of policies available to help boost your trade: 

  • Whole Turnover Insurance – Provides cover for your entire book of business. 
  • Single Debtor Insurance – Covers your business against bad debts from a single customer. 
  • Named Buyer Insurance – A bespoke policy that protects against the insolvency and protracted default of two or more specific customers.  
  • Export Insurance – Offers cover for trade outside your domestic country. 
  • Excess of Loss Policies – Protects your business against larger, potentially disastrous losses. 
  • Top-Up Insurance – Additional cover to boost a credit limit offered by another credit insurer.
  • Single Invoice Insurance – Covers single or multiple invoices with one of your customers. 
  • SME Policies – Designed to provide cover for small/medium-sized enterprises.  
  • Multinational Trade Credit Insurance – Bespoke cover for businesses operating across two or more countries. 
  • Non-Cancellable Policies – Offers non-cancellable credit limits on customers/debtors/buyers. 

When taking advantage of a trade credit insurance policy, a specialist broker will talk through all the coverage options with you. 

What will Trade Credit Insurance cost?

Just like other insurance you might have purchased, the costs for an SME depends on the specific circumstances of your company. The insurance company will consider your industry sector, number of customers, turnover, loss history, and other factors to calculate your quote. 

With a specialist broker, it is easy to get multiple no-obligation quotes so you can quickly decide if credit insurance is something you want to explore. Get your quote today. 

How to get credit insurance

As an experienced, specialist UK credit insurance broker, FinCred is uniquely equipped to find insurance solutions that enhance your credit management strategy. 

From first contact to after the policy is in place, we act with your best interests at heart, arranging the best solution for you. 

Ready to get a quote?

Interested in how FinCred can help your SME? Don’t hesitate to send us a message or give us a call today: Contact Us.