Who’s Crazy Enough To Get In The Fuel Business?
Over the holidays, my family and I took a trip to Ft. Lauderdale. While taking a boat taxi, we observed a group of fuel trucks lined up to put 60,000 gallons in an extremely large yacht. While I was in awe of the sheer size of the vessel, it got me thinking about the sheer volume of fuel it took to fill it up and the relatively small profit margin of the fuel company. It takes guts to get in the fuel business. With so much exposure and such small margins, what would happen if the customer didn’t pay? Even with good credit procedures, short terms, and EFT, there is still a risk of a potential non-payment. For a fraction of a penny per gallon, would it make sense to guarantee your customer paid his bill?
Many companies experience this non-payment stress when they don’t have to. Credit insurance is an insurance policy that guarantees your receivables. Businesses don’t think twice when insuring their trucks, buildings and equipment. Their A/R, however, can make up to 40% of their assets but is the most commonly uninsured. For a fraction of a penny per gallon, it makes too much sense to not explore how credit insurance can help your company.
Credit insurance is a cost-effective sales tool that allows you to insure your receivables so you can safely sell more to your existing customers, go after new customers that may have been a credit risk in the past, and expand into new markets you originally perceived to be too risky. Credit insurance offers solutions for safe and profitable growth:
- Grow sales safely, domestically and abroad, to new and existing customers
- Protect your business from risk of non-payments
- Make better and faster credit decisions
- Ease tensions between sales and credit
- Avoid personal guarantees
- Borrow better from the bank by eliminating concentrations and obtain higher advances with lower rates
- Eliminate letters of credit and replace them with a tax-deductible insurance provision
- Give you leverage to collect from your customers
Contact us to see how credit insurance can help grow your business while protecting you from losses. If you are already using credit insurance, we can help you see how your policy stacks up to the rest of the market. There could be some ways we could work with your carrier to reduce your premium or enhance the policy. Better yet, there is no fee to work with us. We work with all credit insurers and allow for the best rates and maximum coverage.