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Coface: credit insurance, how does it work?

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Coface: credit insurance, how does it work?

Coface: credit insurance, how does it work? Credit insurance is essential for companies wishing to limit the risk of default or late payments. But what exactly does it consist of, what services does Coface offer and what are the threats to corporate solvency? Here are some answers.

What is credit insurance?

Using credit insurance guarantees your business to develop profitably in the long term. This is to ensure the monitoring of business partners, including customers, to ensure their solvency. In other words, it’s the way to make sound financial decisions and be sure the customer will honor their bill on time.

Services and products can be delivered with more serenity, without fear of unpaid or late payment.

Besides, companies benefiting from this financial guarantee are also covered and indemnified in the event of debts not honored by their business partners. And this, whether it is an activity within France or for export. Society is therefore protected at all levels.

What are the risks to which companies are exposed?

One of the most important issues for small businesses and SMEs is dealing with late or unpaid payments.

Indeed, these non-payments sometimes weigh heavily on a company’s budget, often forcing managers to dip into their funds to continue to support their activity and buffer the time of collection. Concretely, this is the main statistical cause of business failures.

This is a risk that is all the more important for companies whose turnover is mainly made up of a major client. The viability of their business depends on its financial health and solvency. Some companies find themselves forced to go out of business because of these kinds of situations.

Even when unpaid bills are not the source of a bankruptcy or bankruptcy filing, they remain very handicapping for the company which bears the cost. Indeed, weighing heavily on solvency, late payment forces the organization to make up for deficits and therefore to increase its turnover.

It is in this context that credit insurance appears to be a reliable solution. It makes it possible to ensure the solvency of business partners and to carry out recovery measures in the event of a problem.

How does this solvency guarantee work?

The credit insurance offered by Coface makes it possible to insure sales, to cover risks in a personalized way, to finance the development of the activity and to estimate the value of the markets. Coface provides companies with a network of experts around the world, able to verify the financial health of suppliers or potential customers.

The risks of late payment are already significant in France, but they are even more so for companies that decide to export outside the borders of France. Many criteria must be taken into account, including the social, economic, and political situation and the countries concerned. Thanks to credit insurance, decision-makers have a good knowledge of local conditions:

You only sell your services or products to good payers.

You know in real time their financial health and the economic situation of their country.

You collect your debts with tact and negotiation to continue to maintain good business relations.

In the event of a problem, you are guaranteed to receive compensation for your unpaid invoices.

All companies without exception, regardless of their size, are affected by the solution offered by Coface.

Hello, I have been working as an investment consultant and author for more than 20 years. I love what I do and I have enriched everyone around me. A lot of money is not important, the main thing is how you use the money.

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