Accounts Receivable Insurance

Universal Funding provides accounts receivable insurance that helps protect clients from unforeseen and unexpected potential losses due to their customers’ inability to pay because of insolvency or bankruptcy.

The basic definition of accounts receivable insurance states that it is a form of credit insurance offered by commercial insurers to businesses. Accounts receivable insurance can take the form of multi-buyer insurance (a pool of receivables) or key buyer insurance.

Investopedia explains ‘Accounts Receivable Insurance’:
Account receivable insurance can be particularly useful for new or rapidly growing businesses that cannot afford to do credit checks. For a relatively low fee, account receivable insurance protects a company against loss on receivables, including default, bankruptcy or simply slow payment. This insurance can also protect a company that is unable to collect receivables due to loss of the underlying records (for example, in a fire).

At Universal Funding, we would assess the risk of your customers’ credit and payment cycles to determine a recommendation for accounts receivable insurance. This assessment is one of the added services we provide to all of our clients. If the assessment proves that your accounts would benefit having additional AR insurance, we would work with a third party vendor to provide those services.

Protecting Your Profits

When you have invoices that are yet to be processed and paid by your customers, instead of waiting for the terms quality factoring company, you should have access to accounts receivable insurance as a part of their services. Essentially, they provide you with immediate financing and offer protection from non-paying customers who have fallen on hard times and have become delinquent in paying on your invoices.  Many times you bear the brunt of the burden when a customer goes out of business and still owes you funds for products and services you already provided.

Accounts receivable insurance is a type of credit insurance that is often purchased by commercial businesses or insurance companies. It is very useful for a business that is growing rapidly and does not have the resources to do regular credit checks on new and existing clients. By partnering with a factoring company like Universal Funding who offers this added benefit, your company can get accounts receivable insurance that will protect you against lost receivables. This includes receivables from companies that have defaulted, claimed bankruptcy, or failed to pay within the allotted terms. The insurance protects your company in case you are also unable to collect any money from the client and helps to provide the much-needed protection that you need to continue your business in a profitable manner.