No one will deny that the current economic climate is a fairly difficult one and it is becoming increasingly difficult to find new customers and hold on to the ones that you currently have. There is so much competition out there and before you only had the other businesses in your local area to worry about. Now, there is the whole world’s business to compete with and it’s getting difficult to maintain a foothold in any market. Obviously, the Internet has opened many more opportunities for the businesses in Australia as well, but because of uncertainty, you never really quite know where you stand.
One issue that concerns many businesses, especially ones that rely on 2 or 3 specific large customers for their business, is that any business can go bust at any time or get into cash difficulties and because you have extended them 30 or even 60 days credit, you might not get paid. It is impossible to work under such conditions due to the stress and the financial hardship that it would bring to your business, so you need to take out some kind of insurance to protect yourself and this is where trade credit insurance comes in.
Trade credit insurance is there to cover your business in times of uncertainty and it gives you the added protection and the peace of mind that every business should have. Here are some of the benefits for having such a thing.
- It can actually improve your sales growth because you know that you have the insurance backup if customers default. You can give better credit terms to encourage new customers and current customers to buy more, thus increasing your profits and bottom line. You can actually look to the export market as well because trade credit insurers can also cover you for any risks associated with exporting. They also provide you with the knowledge needed for such a market.
- For any of the sales that you have made on credit, should that company go into insolvency, then you are protected in case of customer default and this gives any business the peace of mind and the confidence to grow their business knowing that the insurance company has their back.
- Trade credit insurance also helps with your company’s cash flow. Should a company that owes you money default, the insurance will cover your losses and ensure that your cash flow remains strong.
It makes sense to take any measures that you can to protect your business and thus your employees and trade credit insurance can do that for you. To give yourself peace of mind and confidence in your business as you move forward, be sure to get trade credit insurance.