ABC Limited, a medium-sized manufacturer with a turnover of £12,000,000, was on a mission to scale new heights in the business landscape. With a well-established customer base as its foundation, the company was looking to expand, particularly in international markets, aiming to bolster sales and enhance its market share.

However, this ambition came with its set of hurdles. The company grappled with the challenge of evaluating the creditworthiness of new potential clients, especially in uncharted markets. Additionally, the looming threat of bad debt and possible non-payment by new customers was a significant concern that could not be overlooked.

In a strategic move to counter these challenges, the directors decided to secure credit insurance. They enlisted the expertise of a specialist broker to ensure they obtained the best terms and comprehensive coverage. This coverage was not just a safety net; it was an enabler, offering the company the confidence to venture into new markets while safeguarding its financial interests. It covered both domestic and international sales, thus facilitating a broader expansion.

The acquisition of credit insurance proved to be a game-changer for ABC Limited. It allowed the company to delve deeper into the credit profiles of potential customers, making well-informed decisions and focusing their efforts on engaging with financially stable companies. This strategic approach enabled them to extend their reach into international markets without the constant worry of financial loss due to non-payment. Furthermore, the company could offer more favourable payment terms, enhancing its competitive edge and attracting more business.

The insurance also allowed ABC Limited to stay focused on its core strengths—manufacturing and innovation—by outsourcing the intricate management of credit risk. This strategic shift paid significant dividends when a major customer defaulted, owing them £200,000. Thanks to the credit insurance, ABC Limited received 90% of the net loss from the insurer, a crucial financial reprieve considering the company would have had to generate an additional £4,000,000 in sales to offset such a loss.

“I can’t thank you enough for the support you have given, and continue to give, to our business. We are so pleased that we took out cover when we did.  You have made the policy management process very easy to manage for myself and the team.”

ABC Limited not only averted a potentially crippling financial setback but also saw its sales increase to £15,000,000. This growth in sales and market share was a direct testament to the company’s successful strategy and the robust tool that credit insurance proved to be in the competitive global marketplace.

It’s a clear message to other businesses: the right strategic tools can not only safeguard against unforeseen financial risks but also pave the way for sustainable growth and expansion.

So, why wait? Enhancing your business prospects is crucial, and with the unpredictable nature of markets, the risk of a bad debt could be just around the corner. Take a leaf out of ABC Limited’s book and consider how credit insurance could be the key to unlocking your business’s potential growth.