Why Purchasing Trade Credit Risk Insurance for Your PA Business Is Smart

by | Jul 1, 2022 | Finance and Insurance

If you run a business that involves lending credit to clients and customers, you already know how lucrative that practice is for building a loyal base. However, there are also significant risks involved in this and you need to tread wisely or risk putting yourself out of business. To combat this, it makes sense to look into purchasing trade credit risk insurance. There are many benefits to using this as a business tool.

Expand Your Sales

If you have your receivables insured, it is far easier to sell more to your existing customer base or market to customers who may have been considered too risky without the safety net of an insurance plan in place.

International Sales

Expanding into international territories presents a unique set of export risks. However, with risk insurance in place, you can more confidently attempt international expansion in an aggressive manner. You will also have access to detailed market conditions that you may not have had otherwise.

Lucrative Financing Terms

As far as borrowing money from banks, they tend to offer better financing terms when they know that the receivables are insured against loss. They are also more likely to lend more money to you. It is basically a win/win situation for all involved.

Tax Advantages

There are several tax advantages to carrying Trade Credit Risk Insurance. The most important one is probably the fact that the insurance premiums are tax-deductible whereas holding bad debt in reserves is not deductible.

If you are interested in purchasing just such an insurance policy, please contact the Trade Risk Group at https://www.traderiskgroup.com

Latest Articles