Serving the needs of startup and enterprise companies presented Vision Business Products with tough credit limit decisions on a regular basis – leaving the company to hold down limits for fear of default, which left potential revenue on the table. Signing a credit insurance policy with Euler Hermes gave the company the confidence it needed to offer the right limits to its customers and to grow while safely mitigating risk.
I/T Products Provider
Safer sales growth
Financial peace of mind
Vision Business Products (VBP), a Carnegie, Pa.-based IT solutions provider, never wants to leave revenue on the table with certain projects. When a longstanding customer entering a period of rapid growth requested a significant credit limit increase from $200,000 to $600,000, VBP faced a crucial decision. Such situations are not unusual in VBP’s business. The company is a project-driven business that regularly works with start-up and enterprise companies in need of large credit limits, which expose the company to substantial nonpayment risks.
“If we denied the credit request in this case, we would have lost a major five-year-old account and a significant revenue opportunity,” said Jeff Woolley, the company’s general manager. The decision was not clear cut. While the customer had a solid track record of on-time payments, VBP felt that the customer had a weak balance sheet. “We knew it would be risky to increase the credit line past $200,000,” he said.
“we have leveraged our Euler Hermes policy to enable safe growth with more than a dozen buyers in similar situations.” - Jeff Woolley, the company’s general manager
VBP decided to explore risk management options for resolving the situation. Based on feedback from a colleague from another company who had leveraged credit insurance to protect high volume/low margin accounts, VBP began investigating credit insurance and chose Euler Hermes based on its superior knowledge, service, and financial stability.
The impact was immediate. “After implementing the policy, we were able to raise the customer’s limit to $600,000, where 90% was guaranteed by credit insurance,” said Woolley. Since then, “we have leveraged our Euler Hermes policy to enable safe growth with more than a dozen buyers in similar situations.”
When a client’s situation exceeds the underwriting capabilities of VBP’s standard credit insurance policy, the company relies on Euler Hermes’ CAP product to cover these higher-risk transactions. “CAP allowed us to double our credit line for a very reasonable cost,” said Woolley. “There are no painful discussions with customers about paying down their balance each month so it makes it easier to do business.”
In addition to safe sales growth, VBP’s partnership with Euler Hermes has also increased operational efficiency with their projects. Acting as an extension of its credit department, Euler Hermes enables VBP to make fast, reliable credit limit decisions, freeing up valuable internal resources for other critical business functions.
“Euler Hermes provides us with the information we need to pick the right new customers and raise limits on our current accounts,” said Woolley. The Euler Hermes policy has allowed it to take on several high impact deals that it would have declined without credit insurance. “The biggest benefit of credit insurance is the ability to take on any deal size and not feel any project is too big for us,” said Woolley. “This has helped us grow and handle larger project deals with ease and safety.”