French trade credit insurer Euler Hermes has launched a credit insurance product in the US, which offers cover to protect small and micro businesses against the risk of non-payment by customers.
The insurer is known for its trade credit products for multinational corporations but the new product, named Simplicity, is designed for US businesses with annual sales of between US$1m and US$5m, which probably have not previously purchased credit insurance. Policyholders can automatically and immediately protect domestic and export buyers in 32 countries, allowing them to focus on growing sales without the risk of customers defaulting on payments.
“With Simplicity, small business owners can safely extend credit to domestic and international customers knowing there will be minimised impact to cash flow as a result of non-payment events,” said James Daly, president and chief executive officer (CEO) of Euler Hermes Americas
He added that many US businesses fail because of late or non-payment by customers. “As many as 82% of business failures are due to poor cash management.”
US economic growth relies significantly on small businesses, which have increased by 49% since 1982. The US Small Business Administration reports that the country now has a total of 28m, which account for 54% of total sales and 55% of jobs created.
Managing cash flow remains among their man concerns and with Euler Hermes suggested that companies need credit protection more than ever due to a worsening economic outlook in the US.
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