About Credit Insurance for Project

1.   What is Credit Insurance ?

Policies cover the risks of non-payment of trade debt, that is, amounts owing to you arising from goods or services you have supplied. Standard Cover is for insolvency and late payment for domestic and /or export trade. You can add protection for political risks and for work-in-progress.

2.   What are the benefits ?

With the lack of transparency of company accounts, credit risks is high, yet you need to give credit terms to your customers to stay competitive.

-       Credit Insurance protects you against the impact of bad debt, so you can reduce you reserves, even in an economic downturn.

-       Buying Credit Insurance enhances your credit management and is good Corporate Governance

-       It enables you to sell on credit terms without taking undue risk on to your company’s balance sheet

-       Export Credit Insurance opens up new markets for your company

3.   How Does Credit Insurance help Finance my Business ?

 Credit Insurance protection can be used to back-up a cost-effective receivables finance programme, or to provide bad debt protection behind a factoring or invoice finance facility.

4.   Are there any additional Benefits ?

Credit Insurers have extensive libraries of up-to-date company and economic information. They can provide a limits service to enable you to decide on the best level of credit for each customer, freeing up your management’s time. They can also provide collections advice and worldwide collection services.

Credit insurers assess risk by analysis of credit references, company accounts and information from other policy holders.

It is the Credit Insurers, not you, who suffers if the credit recommendation is wrong.

5.   How Does Credit Insurance Works ?

A typical policy covers invoice raised during a year

-       To activate the cover, you establish credit limits on your customers

-       You advise the insurer of overdues or other problems

-       Premium can be charged on the limits or as a percentage of turnover

-       Claims are paid at 85 – 90% of loss after a waiting period (30 days for insolvency, longer for slow pay and political loss).

6.   Does it Suit Me ?

-       Small and Medium-Sized  Entities (SMEs) enjoy the protection and out-sourced decision-taking provided by Credit Insurance

-       Larger Companies and multi-nationals benefit from balance sheet protection and standardization of credit management procedures across all business units.

7.   What About International Programmes ?

A corporate with operations in several countries may wish to have commonality of credit management. It may need protection to be arranged locally or to be centralized.

Credit Insurance programmes are designed to follow corporate objectives.

8.   How do I buy Credit  Insurance ?

Agra, as independent broker, helps you to evaluate the best option for your company’s credit management, your risk appetite and financing needs. We are trained to provide innovative solutions, to implement the policy of protection to support and avise in the event of loss and in the negotiation of claims.

9.   What does it Cost ?

Prices vary, but to obtain a cost, you will need to submit details of your receiveable and credit management processes to us, and we will negotiate competitively priced cover on your behalf.

10.   How to calculate the Premium for Credit Insurance

The premium calculation is determined by the basis of your credibility and the buyer portfolio who will be off-taker of the products sold. The Credit Insurers usually reluctant to cover the new-established-company who receives the financial fund and new-established-buyer companies.

At the end, Credit Insurer will determine plafond on each buyer company as per the equity and financial performance as well as funding value given by the Principal. 

Nevertheless, Credit Insurers allows negotiable Premium Calculation and Installment Period, should the Credit Insurers have satisfaction assessment results,  on the Financial Performance of the buyer Companies in the list of the Company who received financial funds from the principal

11.   What Requirements should be fulfilled ?

The Financial Fund Receiver Company should submit the following documents :

1.    Complete Filled Application Form

2.  Company Profile – Complete Documents

3.    Feasibility Study and Due Diligent of the project

4.    Details of Each Buyer Company in the list for the Project, including Financial Reports

5.    Copy of the MoU