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Imagine you run a successful business supplying building materials to construction companies. Business is booming, and you’re constantly striving to meet the demands of your clients. You offer credit terms to builders to help them manage their cash flow, but what happens if one of your biggest clients goes bust owing you a significant sum?
This scenario is becoming increasingly common in the Australian construction industry, as reported by the ABC. A recent surge in building costs and insolvencies among builders is leaving suppliers like you exposed to bad debts.
The Problem:
The article highlights the following issues faced by building suppliers:
- Rising costs of materials and labour are squeezing profit margins.
- A spike in builder insolvencies is leading to unpaid invoices.
- These factors can create cash flow problems for suppliers, potentially crippling their businesses.
The Solution: Trade Credit Insurance
Trade credit insurance acts as a financial safety net for your business. It protects you from the financial losses incurred when a customer fails to pay their debts due to insolvency or protracted default. Getting a free quote is simple. We just need some basic information about your top customers and any bad debt history. Our team can take care of the rest.
Benefits of Trade Credit Insurance for Building Suppliers:
Safeguards cash flow: Trade credit insurance ensures you receive payment for your supplies, even if a customer defaults. This protects your cash flow and prevents financial strain on your business.
Enables growth with confidence: By mitigating the risk of bad debts, you can confidently extend credit terms to new and existing customers. This can lead to increased sales and business growth.
Improves risk management: Trade credit insurance allows you to better assess the creditworthiness of your customers and make informed decisions about extending credit.
Provides peace of mind: Knowing that your business is protected from bad debts gives you peace of mind and allows you to focus on running your business.
The Case for Trade Credit Insurance in the Current Climate
The current climate in the Australian construction industry is particularly risky for building suppliers. With rising costs and builder insolvencies on the rise, trade credit insurance is a vital tool for protecting your business from financial losses.
By investing in trade credit insurance, you can safeguard your cash flow, ensure business continuity, and position yourself for future growth.
Don’t wait until it’s too late. Contact NCI today to discuss how they can protect your building supply business.
As Australia’s leading trade credit insurance broker, NCI is uniquely placed to report on the ‘ups and downs’ of the country’s inter-business trading climate. With frequent media reports on the fluctuations of business trade credit factors, NCI’s is ideally placed to demonstrate the extremes of Australia’s economy.
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