Credit insurance vital for firms wishing to begin or increase overseas trading

The UK goods trade deficit is the highest since records began, according to recent figures from the Office of National Statistics (ONS).

The report showed that the difference between the UK's exports and imports reached £9.3 billion in December 2010, the highest since January 1980.

It is thought the bad weather conditions were partly to blame, although industry analysts had expected the figure to decrease compared to November’s deficit of £8.5 billion.

However as the export/import shortfall continues to widen, international trading conditions are currently favourable for UK businesses, with the weakened sterling having brought down the price of goods.

This presents expansion opportunities for firms of all sizes across a variety of sectors which have the means to export. 

Late payments are thought to be a major concern for management teams considering exporting their products, with time differences, language barriers and increased administration all stretching payment terms.

However, Martin Walmsley head of debtor insurance at Lloyds TSB Commercial Finance, believes the pros outweigh the cons but that companies should employ credit insurance to provide peace of mind when shipping goods abroad.

“The ONS statistics actually revealed exports were up by 17 per cent in 2010, the highest increase since 1977. However, this figure was swamped by a high volume of imports.

“The government hopes for an export-led recovery and it makes good business sense for firms to capitalise on lucrative international markets, especially in Asia.

“For any company worried about bad debt and working capital being tied up in late payments overseas, I would advise implementing credit insurance, such as our debtor insurance policy.

“Covering up to 90 per cent of bad debt suffered at home and abroad, the policy allows businesses to trade confidently and put in place a solid expansion strategy for the future.”