Accounts Receivable Insurance
What is it?
As the name suggests ARI is a risk transfer tool that protects the insured's Accounts Receivable from losses resulting from:
- default by the buyer;
- insolvency of the buyer;
- repudiation of goods placed at the buyer's disposal;
- incovertability or transfer of foreign currency;
- war and related disturbances.
Benefits of Accounts Receivable Insurance
- Protects the company's second most liquid asset. Take a look at your Balance Sheet. Every asset with one exception-your Accounts Receivable!- is insured.
- Peace of mind and another set of eyes validating your buyers' creditworthiness.
- Enhance your access to much needed working capital by pledging or selling your credit-enhanced Recaivables to a bank or other financial intermediary
- Free up your limited capital for more productive uses.
- Improve your cost of capital.
- Give yourself a competitive advantage in a very competitive global market place by offering buyers or prospective buyers more liberal payment terms.