Recessions often change businesses. In 2008-2009, Specialty Forest Products, a Pacific Northwest wholesaler of high-quality hardwood lumber, lost 65% of its industrial customers and saw margins contract and nonpayment risks dramatically increase. “Recovery was difficult, and nobody expected it to take as long as it has,” said Doug Konop, the company’s CFO. “We needed a solution to help protect our existing customer base and support our business through this newfound uncertainty.”
Understandably, the company became much more conservative when it came to extending credit. “One or two bad debts can wipe out our profit for the year,” said Konop. It was at this point the company began exploring credit insurance as a tool for supporting top line growth during their recovery.