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Frequent Contributor
nik
Posts: 119
Registered: ‎31-03-2016

Pros and cons of the Trade Credit policy?

Can someone objectively tell me the pros and cons of the Trade Credit policy?

Anuj Shergil
2 REPLIES 2
Frequent Contributor
reji
Posts: 114
Registered: ‎26-07-2016

Re: Pros and cons of the Trade Credit policy?

Trade credit insurance, business credit insurance, export credit insurance, or credit insurance is an insurance policy and a risk management product offered by private insurance companies and governmental export credit agencies to business entities wishing to protect their accounts receivable from loss due to credit risks such as protracted default, insolvency or bankruptcy. This insurance product is a type of property and casualty insurance, and should not be confused with such products as credit life or credit disability insurance, which individuals obtain to protect against the risk of loss of income needed to pay debts. Trade credit insurance can include a component of political risk insurance which is offered by the same insurers to insure the risk of non-payment by foreign buyers due to currency issues, political unrest, expropriation etc.

Frequent Contributor
Ena
Posts: 79
Registered: ‎26-07-2016

Re: Pros and cons of the Trade Credit policy?

Trade credit is offered by many suppliers to trade channel buyers to encourage more frequent and higher volume purchases. Smaller companies with limited cash on hand often rely on trade credit to make inventory purchases on a regular basis. Trade credit has benefits to both the buyer and seller