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Trade Credit Insurance is also known as Credit insurance. It is considered as a risk management tool that covers the payment risk which may arise from the delivery of goods. As per this policy credit insurer usually pays as per an agreed percentage of invoice or account receivable that is unpaid.
Trade credit insurance helps to protect manufacturers, traders as well as service providers against the losses of non-payment in commercial trade debt. If a buyer does not pay (due to certain reasons such as bankruptcy or insolvency) or pays late after the due date, the trade credit insurance policy will have to pay a specific percentage from the outstanding debt.
Trade credit insurance results in preventing bankruptcies along with this help companies to manage credit, and even introduce them with opportunities for business expansion in the global marketplace.
Firms should turn to trade credit insurance when they are having a credit problem or there could be foresee exposure in the near future. But it can often be too late for insurers to take on and cover the risk. Trade credit insurance may help companies for applying longer term risk management strategies so firms are advised to consider trade credit insurance when business is stable and in good. Such that if a problem strikes, there would be no need to engage them trying coverage for an uninsurable risk.
The primary function of trade credit insurance is protecting sellers against buyers that do not pay for the delivery due to some unforeseen circumstances. It insures seller against a buyer that has declared in certain condition such as bankruptcy, insolvency or a similar legal status, as well as this policy protect insured’s against buyers who delay payments under such legal status.
As per the International Credit Insurance & Surety Association “If a buyer does not pay to the seller for the service being availed, the trade credit insurance policy will have to pay out a percentage of the outstanding debt. This percentage can usually range from 75% to 95% of the invoice amount, but might be higher or lower and that depends on the type of cover that was purchased.
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Complete online application process makes it easier for us to process forms faster and provide same day loan approvals.
With online loan processing, business loan is disbursed within 3-5 business days of loan approval.
No need to put your valuable assets in risk, we have unsecured loan that do not require any collateral.
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Loan repayment structure can be customized depending upon how your business is growing.