As a business owner, you want to do everything you can to keep your company safe. Trade credit insurance helps protect your business against risk, which may stem from political or financial reasons. You need to understand what credit insurance is and how it works before you can enjoy the benefits.
What is Trade Credit Insurance?
Trade credit insurance is an arrangement designed to allow you to expand your business without the risk of loss due to to defaulting, bankruptcy, or insolvency from your foreign buyer. It is different from credit disability or credit life insurance, as these forms safeguard individuals from the loss of income, which affects their ability to pay their debts.
How Does Trade Credit Insurance Work?
Trade credit insurance, or TCI, works very similarly to a regular insurance policy. In an uninsured case, you could lose as much as 100% of the sale if it falls through. With TCI coverage, you pay a premium on the transaction. In the event of a customer defaulting for political or commercial reasons, it will cover up to 95% of the invoice amount.
There are several important benefits associated with trade credit insurance, including:
- Reduced risk of nonpayment by the buyer
- Increased cash flow for your business
- Easier time attracting and retaining international clients
- Better confidence when trading with new and foreign parties
The Drake Difference
At Drake Finance, we’ve been serving United States companies for nearly twenty years. We have the experience you need to negotiate through trade credit insurance arrangements as quickly and simply as possible. We work with clients all across the globe– as well as the Export-Import Bank of the United States, which serves as the official export credit agency for our nation.
Our mission has always been to help other businesses grow by providing the support and services they need. When it comes to trade credit arrangements, we’re different because we’re effective and reliable. For example, we can advance as much as 90% of an export invoice when it’s insured, so you get your money faster and with less hassle.
If you’re ready to learn more about trade credit insurance and how we can make it work for you, call us or fill out a simple online form today. You’ll be glad you did.
Please Join Us In Welcoming Our Newest Team Member!
We are pleased and excited to introduce Gabriela Crespo as VP of International Trade Finance here at Drake Finance.
Gabriella is a seasoned global trade professional who joined us after working in the banking industry for more than 15 years covering the South East. In fact, she spent most of her career in correspondent banking at Chase, American Express Bank and Standard Chartered Bank; covering South America, US and Canada.
Originally from Buenos Aires, Argentina, and having lived in both New York and Atlanta, Gabriella has finally settled in sunny Florida where she continues to develop her passion for Global Trade at Drake Finance.