Bank On Your Line of Credit with Credit Insurance

Despite the Troubled Asset Relief Program (aka TARP), many banks have decreased the amount of loans they are granting their customers. This is a daunting problem as many small toy businesses depend on a loan or generous line of credit to fund their operations. Fortunately, a bank’s hesitancy can be addressed with credit insurance.

"Banks are likely to turn a ‘No’ to a 'Yes' when they are confident that their capital will be repaid," says Benjamin Thrush, Vice President of HUB International Northeast. "A simple promise to make your payments on time is increasingly not enough evidence. A bulletproof way toward providing it is to acquire credit insurance for your accounts receivable. This coverage assures banks that all covered receivables will be paid, either by the customer or the insurer."

"Take the case of high-end retailers, many of whom are struggling in this challenging business environment'" says Eric Rutig, Sales Vice President of Euler Hermes ACI. "These companies are forcing their suppliers to wait, making their payments in 60 to 90 days. Inevitably, these suppliers need cash for materials, labor, technology and the like. Unless they can find a way for the banks to finance them, their very existence is threatened. Credit insurance, which runs on average 15 to 45 basis points, is a very effective solution."

Not only will a small business' ability to secure loans become easier with credit insurance but the related interest rates will also end up being lower. If you have any questions, or would like a free analysis of your current policy, contact Benjamin Thrush (1-800-706-3023). For more information on HUB’s business insurance offerings to the toy industry, please visit the newly updated www.hub-tia.com.