Domestic Trade Credit

Most companies extend credit to local customers without realizing they are exposing themselves, and their lenders, to significant risk. When domestic receivables are uninsured, every sale becomes a form of unsecured lending. For banks, financing those receivables often means indirectly extending unsecured credit to large borrowers, with little visibility into the underlying buyers’ financial health

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The Reality:

• Having buyers in the same country does not eliminate credit risk.

• Buyer information is often private, leaving lenders blind to true exposure.

• One large domestic default can erode cash flow and threaten loan repayment.
   

For Lenders:

• Domestic trade credit insurance transforms opaque receivables into transparent, secured collateral.

• It reduces credit exposure, supports regulatory capital requirements, and gives confidence to extend larger facilities.

• WIP and holdbacks can also be insured, giving the lender access to a broader and more secure collateral base across the borrower’s supply chain.

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For Companies:

• Protect against customer defaults in your own market

• Turn receivables into reliable collateral that strengthens borrowing capacity

• Grow sales without putting working capital at risk

• Include WIP and Holdbacks in your coverage to access more capital

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Even when dealing with long-standing domestic buyers, undisclosed financial stress can lead to unexpected defaults. A standard domestic trade credit policy covers up to 90% of your receivables, protecting your working capital and keeping cash flow steady. This gives your lenders confidence that most of your domestic sales are secured, allowing you to extend terms without taking on excessive risk.

Domestic trade credit insurance turns unsecured risk into bankable security. It creates resilience for companies and confidence for lenders, ensuring local growth isn’t built on hidden vulnerabilities.