Euler Hermes has become the US's first trade credit insurer to offer a customized product to protect micro and small businesses from the risk of not being paid by their customers.
The company announced today the launch of Simplicity, a new credit insurance designed to help small businesses mitigate their accounts receivable risk in a quick, simple and affordable manner, while at the same time maximizing business growth.
Simplicity is designed specifically for businesses with $1-$5 million in annual sales. The product is intended for companies that are new to credit insurance – it provides a short, clear policy, transparent coverage on all buyers within just one day, and fixed pricing. Policyholders can automatically and immediately protect domestic and export buyers in 32 countries, allowing them to focus on safely growing sales without the worry of non-payment.
"According to a recent study, as many as 82 percent of business failures are due to poor cash management," said James Daly, president and CEO of Euler Hermes Americas. "With Simplicity, small business owners can safely extend credit to domestic and international customers knowing there will be minimized impact to cash flow as a result of non-payment events."
In today’s uncertain economic environment, small business owners constantly face new challenges and barriers, while remaining a critical engine for economic growth and job creation. According to the U.S. Small Business Administration, America’s 28 million small businesses account for 54 percent of the country’s sales and 55 percent of all jobs.
While the number of U.S. small businesses has increased 49 percent since 1982, they still report managing cash flow, targeting business opportunities and the economy to be among their chief concerns.
Simplicity helps small businesses address these concerns by combining the established expertise of Euler Hermes’ global risk experts with tailored solutions unique to small business needs. Easy to purchase and administer; it eliminates the need for bad debt reserves and frees working capital for product and customer relationship development. Simplicity also provides insights on potential customers, which small businesses often have difficulty accessing.
For Euler Hermes’ customer Packaging Methods Defined, trade credit insurance was critical when the New Jersey-based company suffered a six-figure nonpayment by a much larger customer.
"I’m living proof of the importance of credit insurance for a small business," said Izzy Eisenberg, the company’s owner. "That nonpayment could have put me out of business if I didn’t have credit insurance. Sometimes companies set aside a certain amount – maybe ½ percent – as a bed debt reserve. That used to work back in the day, and might work for a larger company, but now it’s scary. Euler Hermes gives me a lot more strength than I would have on my own."