Why your company needs receivables 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. You can protect your sales against non-payment risks with a receivables insurance policy.


What credit risks are covered?

Receivables insurance protects your sales against virtually all commercial risks that could result in non-payment of your invoices, including a customer’s bankruptcy, receivership, business closure, ownership changes, protracted defaults, cash flow problems, balance sheet issues, bad faith, fluctuating demand, natural disasters, or general economic conditions in the USA or abroad.


How much does receivables insurance cost?

Premium rates for receivables insurance are based on the terms you extend, the spread of your buyer and industry risks, and your previous credit and collections experience. The cost of trade credit 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 receivables insurance coverage is insignificant compared to the additional business you can obtain by extending competitive credit terms while protecting your sales against non-payment losses.


Why you should work with Meridian

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

All receivables insurance brokered by Meridian is backed by top-rated and re-insured commercial insurance companies. We offer trade credit insurance policies 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 diverse, with experience not only in receivables insurance and trade credit, but also exporting, importing, finance, operations, manufacturing, logistics, and distribution.


Insurance as a sales and financing tool

Increase your sales and profits by using receivables insurance to extend credit 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 receivables 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 local brand recognition.

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

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

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

Covering your receivables with trade credit insurance may also enable you to reduce your bad debt reserves.

Trade 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.