Bank Partnerships

Credit Insurance: An Important Tool for Stronger Customer Relationships

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Banks have an important strategic tool in credit insurance. When you are doing business with companies with credit insurance coverage, banks can be more comfortable lending against those customers’ accounts receivables. This, in turn, creates more opportunities for banks to lend more money to more customers while still managing their own risks effectively.

By partnering with Euler Hermes, banks can:

  • Increase the amount of eligible assets against which their customer base can borrow by including international receivables, aged receivables and concentrations
  • Become the beneficiary on customers’ policies in the event of any losses to bad debt on receivables
  • Strengthen customers’ financial position by ensuring cash flow and balance sheet stability
  • Establish a deeper relationship with customers by developing consultative business relationships rather than simply being a lender
  • Justify better advance rates and less restrictive covenants with credit underwriters 

The Strength is in the Details

Trade credit insurance is unique in its ability to conform to the specific needs of each business. Some companies want to cover the entire base of their accounts receivable while others prefer to focus coverage only on certain customer segments. No matter what approach they take, these covered companies represent a lower risk to any bank lending money against the insured receivables.

Any companies with B2B credit sales over $4 million can benefit from trade credit insurance, including manufacturers, wholesalers, distributors, service providers, and many others. Companies that are growing their business and sales, involved in export, in need of working capital or have concentration risks are all good prospects for trade credit insurance.