Even when things are going well for clients, retail is cyclical and late payments are not uncommon. Having trade credit insurance allows New Elevation to focus on its clients and provide services instead of chasing payments, which can damage relationships.
“A client may fall 10 or 15 days behind on payment,” says Garcia. “Before we had trade credit insurance, our relationship with the client could be harmed because we had to send warnings about suspending services. Now, we don’t do that. We simply sit back and trust that the Euler Hermes is going to be there for us. It allows us to continue doing our business, maintain better relationships with our clients, and at the end of the day, grow the top line.”
New Elevation insures all of its clients and encourages other companies to do the same. “I have recommended Euler Hermes to several friends who run similar companies,” says Garcia. “Someone might complain to me that a customer is not paying them on time, and I will say, ‘You know, if you had trade credit insurance, you wouldn’t be thinking about that. It wouldn’t be an issue.’”
Businesses carry insurance to protect other assets— such as property—and Garcia views trade credit insurance the same way.
“In my mind, accounts receivable is the biggest asset you have in a services business like ours, and that is the one thing that a business is often not insuring. It doesn’t make any sense,” says Garcia. “I think trade credit insurance is worth every penny.”