Credit insurance can be an important strategic tool for banks. When doing business with companies with credit insurance coverage, banks can be more comfortable lending against those clients’ accounts receivables.
This, in turn, creates more opportunities for banks to lend more money to more clients while still managing their own risks effectively.
The strength is in the details:
Trade credit insurance is unique in its ability to conform to the specific needs of each business.
Some companies want to cover the entire base of their accounts receivable while others prefer to focus coverage only on certain customer segments. No matter what approach they take, these covered companies represent a lower risk to any bank lending money against the insured receivables.
