Euler Hermes’ New Insurance Solution to Simplify Trade Credit Management for Small Businesses
Euler Hermes, the oldest and largest provider of trade credit insurance and accounts receivable management solutions, announced that they are launching a new credit insurance product called Simplicity.
According to Euler Hermes, Simplicity will enable small businesses to manage financial risks associated with account receivable payments in a “a quick, simple and affordable manner.”
While Euler Hermes built its reputation for offering insurance for large scale traders, Simplicity is specifically designed to provide mitigate risks for the SME sector, where businesses have a low annual sales threshold.
With a fixed pricing and transparent coverage on all buyers, Simplicity will provide small businesses the peace of mind they need to focus on growing their sales without worrying about “non-payment,” said Euler Hermes.
In the beginning, Simplicity will account receivable insurance for domestic as well as export buyers in 32 countries, giving small businesses the opportunity to do cross border expansion with the same protection.
Commenting on the launch of Simplicity, James Daly, President and CEO of Euler Hermes Americas, said that “With Simplicity, small business owners can safely extend credit to domestic and international customers knowing there will be minimized impact to cash flow as a result of non-payment events.”
He pointed out that a large number of businesses fail because of not being paid on time from their customers. “As many as 82 percent of business failures are due to poor cash management,” said Mr. Daly.
The US economy has been mostly driven by small businesses, where more than 54% of the sales and 55% of the jobs are created. However, often the bulk of the sales generated by a small business is concentrated in a handful of large customers and a non-payment by a single large customer can create havoc.
A customized trade credit insurance like Simplicity will not only help to reduce their bad debt reserve, it will also free up the needed capital to invest in marketing and business development. Euler Hermes claimed that now small businesses need the credit protection more than ever due to the bleak economic outlook in the US.