One-stop-shop service for smaller businesses
Aon has launched a credit insurance service for small and medium size businesses.
The broker said the one-stop-shop service would provides insurance cover for bad debt, knowledge on customers’ ability to pay and a route to additional working capital finance.
Aon said that with insolvencies set to increase in 2009, some 20% more of SMEs had turned to credit insurance last year to protect their balance sheet than in 2007.
The insolvency rate for small companies is expected to rise by 41% by the end of 2009, according to a survey by R3, the trade body for insolvency practitioners . SMEs are facing a vicious circle of customer insolvency and their inability to pay invoices – in turn meaning suppliers themselves will be unable to sustain a viable business when credit is scarce.
Aon has partnered with the Euler Hermes UK for the service.
Elizabeth Jenkin, director at Aon Trade Credit, said: “Today’s volatile economy means SME balance sheets are under pressure from customer defaults, as well as more restrictive bank lending. We wanted to create a simple product to give peace of mind, whilst developing a service that reinforces the credit management function. While we’re offering an accessible and cost effective solution, we’ve brought in the best bits of the service we offer to our larger clients – including access to customer insight and specialist advice on setting appropriate credit limits on your customer base.”
