Trade credit insurance (TCI)

TCI protects companies against losses caused by non-payment of enforceable domestic or foreign accounts receivable obligations.  Depending on the policy, pre-shipment credit exposure may also be covered.  Companies use TCI for a variety of reasons:

  • Increase market share through the extension of open terms
  • Facilitate accounts receivable or payable finance
  • Mitigate risk and protect the balance sheet
  • Obtain third-party feedback on obligor, industry, and country risks
  • Increase leverage on obligors in default
  • Increase confidence among investors, analysts, and banks
  • Harmonize credit and collection practices across multiple divisions

Lenders may use TCI to cover purchased or factored receivables, support letter of credit confirmations, and to facilitate direct financing to end-customers.