Why your company needs credit insurance

You need to extend competitive credit terms to grow your business, but what happens if you don't get paid? Your open-account customers could go out of business, file bankruptcy, run short on cash, take you for a ride, or fail to pay you for any number of other reasons. In addition, your foreign customers might suffer from currency devaluations, foreign exchange problems, or other political risks. You can protect your U.S. and international receivables against non-payment risks with a global credit insurance policy.


What credit risks are covered?

Credit insurance protects your receivables against virtually all commercial and political risks that could result in non-payment of your invoices.

Commercial risks include bankruptcy, receivership, and other kinds of insolvencies, as well as protracted defaults caused by cash flow problems, balance sheet issues, bad faith, market demand, currency fluctuations, natural disasters, or general economic conditions in the USA or other countries.

Political risks include currency inconvertibility, foreign exchange controls, transfer risks, war, strikes, riots, revolution, confiscation, expropriation, nationalization, embargoes, trade sanctions, and changes in import or export regulations.


How much does credit insurance cost?

Premium rates for credit insurance are based on the terms you extend, the spread of your buyer and country risks, and your previous credit and collections experience. The cost of accounts receivable insurance is low, typically a small fraction of one percent based on sales volume.

Whether or not you pass this incremental expense to your customers, the price of credit insurance coverage is insignificant compared to the additional business you can obtain by extending competitive credit terms here and overseas.


Why you should work with Meridian

Over the past fifteen years, Meridian Finance Group has helped hundreds of companies increase their sales using accounts receivable insurance.

All credit insurance brokered by Meridian is backed by top-rated and re-insured commercial insurance companies or by an agency of the U.S. government (Ex-Im Bank). We offer accounts receivable insurance from a wide selection of underwriters, enabling us to quote the most competitive premium rates in the market.

We understand your business. Our staff is multicultural and multilingual, with experience not only in accounts receivable insurance and trade credit, but also exporting, importing, manufacturing, operations, logistics, and distribution.


Insurance as a sales and financing tool

Increase your sales and profits by using credit insurance to extend payment terms that make it more economical for your customers to purchase larger quantities. Shipping bigger orders can help you negotiate better pricing from your suppliers, make longer manufacturing runs, and reduce your inventory carrying costs.

Negotiate stronger representation by using accounts receivable insurance to offer competitive credit terms to your distributors. Provide incentives to keep more of your products in the supply chain, increasing your market share and brand recognition.

Open new markets which your company might otherwise perceive as too risky for extending credit terms without accounts receivable insurance. The opportunity to penetrate and establish market share in emerging economies and industries has never been greater.

Enhance your borrowing capacity and obtain more favorable financing by using credit insurance to include more of your receivables in your collateral base. Accounts receivable insurance makes your A/R more attractive to banks and other lenders, especially if your portfolio includes foreign receivables, concentrations of risk, cross-
aged receivables, or sales into countries or industries outside your bank's comfort zone. You can assign credit insurance policy proceeds to the lender of your choice.

Strengthen your balance sheet and keep your company's financial position secure with credit insurance coverage, despite exposure to unforeseen events, concentrations of credit risks, and changing market conditions.

Covering your sales with accounts receivable insurance may also enable you to reduce your bad debt reserves.

Credit insurance can help facilitate the "true sale" of your receivables per FASB 140, on a case-by-case basis or in the context of a formal asset securitization.