Before you decide to expand your business on an international level, there are a number of factors you have to consider. You need to reach out to a different demographic and establish a new client base, alongside continuing to develop your business in the UK. It comes with a lot of risks. This is why you need to think about what kind of insurance you’ll get to cover your company, and why trade credit is particularly important.
What is it?
Before going any further it’s important to explain trade credit insurance is. Essentially, it can protect your business if customers fail to pay any outstanding debts they have – this usually due to insolvency or lack of funds. Trade credit insurance can help grow your business as it offers you a safety net while you reach out to new customers and increase your exports. If you don’t get a payment you were expecting, trade credit insurance can help pay back either the entire total or a percentage of it. Gallagher can help you find the right policy and help put your mind at ease for uncertain times.
There is an abundance of benefits when it comes to investing in trade credit insurance. Once you’ve found the right insurer, they can offer legal assistance. Plus, alongside giving your company protection against outstanding debts, it can also help you determine the credit of potential customers. This insight can help you come up with an effective strategy to help grow your business even more. By knowing the credit of potential clients, you can work out who would be best to deal with, and potentially which ones to avoid.
Even though you can use trade credit insurance domestically, it’s most commonly used in international markets. This is to make trading between countries flow smoothly, and make it easier for both businesses involved. Now more than ever it’s important that all businesses are protected during their trade deals. The pandemic has boosted the demand for trade credit insurance. Small businesses may not be able to borrow as much from the banks as they used to but nonetheless will still want to seek out ways to reach new clients to maintain a steady cash flow.
There are very few disadvantages for using trade credit insurance – aside from the cost of purchasing it. The main problems companies face are the restrictions when making a claim – but this can depend on the insurer they’ve chosen to go with. There’s also the amount of administration. Regular reports are often required, so it’s important when planning your strategy to factor this time in for your team to work on. You need to make sure you understand the policy thoroughly before you buy it.
When you begin to expand your business, you want to do so confidently. Trade credit insurance can help give you peace of mind and let you focus on continuing making your company as successful as possible. What else do you think is important for developing a multinational business?