Walford Trade Risk, a trade credit risk insurance provider, is rolling out a new product designed to help small businesses protect themselves against the risk of non-payment from their corporate customers.
Reports in Business Insurance this week said Waldorf Trade Risk is launching ReceivaSure, an AR insurance solution for small to medium-size businesses (SMBs) that have at least $100,00 in annual sales. The product will be issued through Nationwide, and is currently available in 40 states, with the remaining 10 states set for the solution's release in the future.
SMBs can receive protection in case their corporate customers become insolvent or file for bankruptcy, or are unable to pay their invoices, according to Waldorf Trade Risk. The product also mitigates the risk of geopolitical factors including foreign exchange inconvertibility and other FX risks, the cancelation of an import/export license, an import/export embargo and other issues.
Insuring against the risk of non-payment of outstanding invoices can support small businesses' access to financing, the company noted.
"Accounts receivable are generally one of the largest assets of small businesses, but are frequently uninsured," said David Waldorf, CEO and founder of Waldorf Trade Risk, in a statement. "When accounts receivable are insured with a reputable carrier, asset-based lenders and trade finance houses are more likely to approve higher advance rates."
Trade credit insurance designed for small businesses is a growing market, with companies like Euler Hermes rolling out products aimed at helping small suppliers protect against the risk of non-payment from their customers. Business intelligence firm CubeLogic launched an update to its corporate risk management platform RiskCubed in 2017 that supports the trade credit insurance.
"Trade credit insurance is an increasingly popular tool to manage accounts receivable risk, effectively converting an unsecured, risky loan to secured collateral," the company said in its announcement at the time. "As a trade finance instrument, the use of credit insurance is growing rapidly amongst energy market participants, primarily due to its relatively low cost, ability to increase liquidity and risk-conversion properties."