ABC Company Ltd was starting to expand into export markets and was trading with a few EU countries on pro-forma terms. As the size of the orders increased, however, ABC were coming under pressure from their overseas customers to grant credit terms. Although they had completed a number of transactions with each of the current customers, they were concerned that they knew very little about each individual company and also that they would be obliged to offer credit terms to other, new overseas customers about whom they knew nothing at all. A further problem ABC had identified was that if a debt fell overdue in Italy, for example, they would have no idea how to go about collecting it or taking legal action, which would no doubt be a costly process.
Due to the worsening economic climate and with a view to being able to offer credit terms to their overseas customers, ABC decided to consider credit insurance.
UK Credit reviewed the market on ABC’s behalf and found an ideal solution – a policy that would cover both the UK and export sales and not only that, would collect any overdue accounts once they became more than 60 days past due date.
ABC were then able to vet all new customers, both UK and overseas before they committed to accepting an order from them as well as having them monitored on an ongoing basis. ABC made good use of the collection facility on the policy and could rest assured that if they were not paid within 60 days of due date, their insurer would either collect the debt or pay them a claim.
