What is CREDIT INSURANCE and why you need it.
Credit insurance protects your foreign and domestic receivables against virtually all commercial risks that could result in non-payment of your invoices. Export credit insurance protects against political risks as well as commercial risks.
Commercial risks include bankruptcy, receivership, and other insolvencies as well as protracted defaults caused by cash flow problems, balance sheet issues, bad faith, market demand, natural disasters, or general economic conditions that prevent your buyer from paying.
Export credit insurance political risk coverage includes currency inconvertibility, foreign exchange controls, transfer risks, war, strikes, riots, revolution, confiscation, expropriation, nationalization, embargoes, trade sanctions, and changes in import or export regulations.
Financial advantages of credit insurance
Credit insurance prevents write offs of uncollectible accounts receivable. The insured is made whole with the risk of nonpayment being absorbed by the insurer.
Exporters utilizing credit insurance no longer must require cash in advance or deal with the unknown costs associated with letters of credit. Rather, exporters improve their competitiveness by offering open account terms with full confidence of payment.
Finally, insured receivables may enable exporters to tap into funds by assigning the insurance policy to banks or factors for immediate payment. GBS is proud to offer the services of our newest partner, XportManager division of CFS International Capital Corp. to our small business clients who qualify. (See our Links page.)
The price of export credit insurance coverage, which may be passed along to your buyer, is insignificant compared to additional sales generated from extending competitive credit terms and the peace of mind knowing that payment will be made.
GBS is a licensed broker in multiple states protecting our clients from financial disaster by offering ExIm credit insurance backed by the full faith and credit of the U.S. government (http://www.exim.gov). We also represent well funded private insurers to mitigate domestic and export credit risks, ocean marine coverage, kidnap insurance, and small business product liability. We work with our clients to improve cash flow by tapping into funding backed by insured receivables which is crucial for continued operation in this current difficult financial climate.
