Bad debt is always a threat to any company, but during periods of economic uncertainty it’s an even greater scourge – every year an enormous number of companies around the world will fail, and their insolvency means that creditors’ businesses are also dealt a financial blow. Credit Insurance protects businesses against this risk, so they can trade safe in the knowledge that customers can and will pay. It can also improve cash flow, increase profitability and facilitate sustainable growth.
Credit Insurance isn’t just about reimbursing the cost of a bad debt once the worst has happened, it can also mitigate the risk from the outset, by properly evaluating new customers, particularly those in unknown markets. This specialised work is best carried out by experienced Credit Insurance brokers who have an in-depth knowledge of the trading procedures of the sector and country – which is why the Global Trade Credit Alliance (GTCA) can offer global traders such a first-class service.
To ensure freedom to make strategic business decisions, working capital is essential. Whether you need a better system of cash flow management, or an injection of cash from a lender, we can help you pave the way to ultimately achieving your business goals.
Our members’ expertise in credit management and risk mitigation, coupled with their in-depth knowledge of the financial markets in their respective territories, means they are in the perfect position to support your finance requirements. They are able to make introductions with the most appropriate financiers, and ensure that your businesses credit systems are such that they meet the lenders’ criteria. Indeed, they may also help you to get a better deal. Credit Insurance, for example, will help to ensure confidence in a firm’s financial stability, and therefore enable the negotiation of more favourable terms when it comes to funding.
When moving into new international markets, it can be difficult to know which companies will be good to trade with, and which should be avoided. In order to mitigate risk, an assessment of a potential customer’s ability to pay is essential, so that an informed decision might be made about whether to enter into a contract with them or not. Once simply considered a ‘best practice’ measure, the credit report has become a key part of today’s new business activity.
Our in-country specialists can help businesses make the right decisions, thanks to the previous claims data provided by detailed credit reports, as well as their local sector-specific and trading conditions knowledge.
Bonds & Guarantees protect companies from unforeseen losses relating to the insolvency of contractors, defective work carried out by a third party, or delays in contract fulfilment – and so offer peace of mind when moving into new markets or facilitating growth by increasing a client base. The usual value of a Bond is 10% of the contract sum, and it provides confidence to proceed with a contract owing to the reduced risk – a failed contract can still be completed once the Bond has been called, and any potential disputes are handled quickly by underwriters, allowing business as usual.
All our GTCA members offer a wide range of specialist Bonds & Guarantees, to suit a variety of business requirements. Depending on the type of Bond or Guarantee, the contractor and the bondsman (which might be a bank or an insurer) share the liability. Bonds & guarantees offered by insurance companies don’t normally affect existing lines of credit.
Credit risk management
Financial Directors need up-to-date information on client risk on a daily basis. Identifying which clients pose the least and the greatest risk, and being aware of the company’s aggregated risk, ensures that businesses can make informed decisions – and enables them to handle clients and budgets more effectively.
GTCA members offer a comprehensive range of Ledger Monitoring and Risk Management services, which can help to reduce risk, financial and operational costs, as well as working capital needs. In addition, an integrated programme can improve efficiency, saving time and improving performance, and facilitating business growth.
Risk analysis tools
Featuring daily analysis and reports, our risk analysis tools provide data on credit limits and ratings, customised automated credit approvals and unlimited credit reports – all from a web-based monitoring system which is working 24/7.
Collection
Our international debt portfolio management tools enable businesses to mitigate losses through proper tracking and monitoring of each debt, as well as essential dispute resolution and corporate law information.