A growing number of firms trading overseas are utilising bad debt insurance
The recession highlighted the increasing need for businesses to export in order to pursue new growth opportunities.
A number of savvy companies are taking advantage of favourable foreign exchange rates to do business overseas and the worldwide growth of the Internet allows firms to easily reach their target markets. In addition, the UK’s reputation for excellence in manufacturing continues to encourage international trade.
However, according to research from Lloyds TSB Commercial, only a third (32 per cent) of SMEs are making the most of the benefits of global export markets, despite the fact that overseas demand can help to fuel growth.
One of the main reasons for not trading internationally, cited by 20 per cent of UK firms, is the fear of being affected by a bad debt.
The burden of chasing up customers in the UK for unpaid invoices is onerous enough. When the debtor is based abroad, those with credit control or business debt management responsibility face the additional concern of having to overcome language barriers or coordinate working hours in different time zones.
These factors are increasingly contributing to a rise in the number of credit insurance policies being taken out by firms which already trade abroad or are exploring global business opportunities.
Lloyds TSB Commercial Finance’s Debtor Insurance policy provides protection against both domestic and overseas debtors, offering cover on a 100 per cent export basis if required.
It therefore gives companies the confidence to tap into international demand and expand abroad safe in the knowledge that they are protected in the unfortunate event that a customer should file for insolvency or be unable to pay its invoices.