As a startup you are always looking for ways to navigate through the tough times that you have to come across owing to funding disturbances. Not everything in your business goes as predicted and you may reach dead ends many times owing to certain shortcoming in fund. When you are self-funding your startup then the problem increases manifolds and you may always have to create a cushion of funds to stay on guard for the unpredictable difficulties.
How does insurance help
A trade credit insurance policy, is very different from any other insurance policy and it is tailormade to serve the unique needs of startups like you. Also, the trade credit policy is one of the most effective ways to protect your business operations from unseen issues with cash flow, unpaid invoices and bad debts. It allows your business to grow, even when the environment is not too lucrative or boisterous. The trade credit policy allows companies to feel secure in extending credit to its current customers, or to pursue new, larger customers that would have otherwise look too risky.
Here’s a look at the top few reasons that makes this policy a must have for startups like yours.
It offers you immense cash flow relief: Unlike other insurances, one of the most important benefit of this insurance is that it protects your business against fluctuations in cash flow – specifically, those caused by bad debts and unpaid invoices. When your clients keep invoices unpaid for a long time, there is a certain sense of risk involved. You have to understand that it can ultimately hint at bigger problems like insolvency at the client’s end. In that case recovering the dues may not even be a possibility. A trade credit insurance here acts as a support system and financially keeps your business afloat with its coverage.
It gives the startup business enough ground for sales growth: The trade credit policy gives your business the right footing and helps it expand and grow without any hassles. It helps you to enhance credit lines with your existing customers and ensures that your business continues to operate smoothly despite non-payment by your debtors.
It gives your business a chance to expand business: When you are a startup for business continuity you will need to continue grabbing clients who may ask for credits. Selling on credit is not easy, especially if you’re operating overseas. With trade credit insurance, the required safety net can be brought in and it will be easy for you to get access into foreign markets on credits, without having to fear negative outcomes. This insurance basically work as a vote of confidence and supports you by enhancing your risk taking appetite.
Even though the trade credit insurance coverage is very inclusive and helps you sail through the difficult days, it is still important to go into the depths of the policy to understand the broader coverage you can expect from the policy and at the same time know what is not covered. The policy in broader terms covers your business-to-business accounts receivable. This means, in case you do not receive what you are owed in case the company you are dealing with declares bankruptcy, insolvency or other issue, or if payment is very late, the trade credit insurance policy will pay out a percentage of the outstanding debt. This is just one aspect, but depending on the coverage you select and the premium you pay for it you can get a hefty insurance claim on your policy.
But, to mitigate the risk better, you need to select the best trade credit insurance policy in Mumbai or anywhere else in India, speak to your agent to decide on the best coverage from the start. Agents like Akshar will never sell you a policy just like that, they will always look closely at your business and it’s every aspect to help you decide on a trade credit insurance coverage, appropriate for your business. So, being a startup it is now on you to seal the best deal with the right credit insurance in preparation of the unforeseen.
Our PURPOSE is to help families & Business, Reduce financial Risk due to unforeseen circumstances, beyond their control & make them financially secure through right kind of insurance advisory.