It’s a situation that many Canadian businesses face daily – you get an order from an international customer you’re unfamiliar with, or maybe one of your existing customers wants to increase the amount of business they are doing with you — and while you want to act quickly on the opportunity, you’re nervous about getting paid.
“We’re hearing the same concern over and over again from many small but growing businesses,” says Richard Ross, Account Manager at EDC. “Companies want protection from the risk of not getting paid and they need it quickly, easily and affordably, without waiting for a traditional credit insurance application to be processed. That’s why we developed Trade Protect.”
Introduced in 2015, Trade Protect is the first of its kind in Canada, offering a simple, online service to insure amounts as small as $5,000 up to a maximum of $500,000 per customer insured. The three-step online application process can take as little as 10 minutes and the insurance covers up to 90 per cent of losses for such events as a customer declaring bankruptcy or defaulting as a result of cash-flow issues. It’s also affordable. A $20,000 credit limit on a U.S. customer covering shipments made over a 90-day period could cost as little as $112.
“Our goal is to make life easier for exporters who want affordable coverage for one or a few customers, and want it fast,” says Ross. “They can apply online and pay by credit card, even if they’ve never dealt with EDC before.”
As well as peace of mind, credit insurance offers other benefits. It can help you grow your export sales by allowing you to offer competitive payment terms to your customers knowing you’re protected. The insurance can also help encourage your bank to provide you with more working capital by making your foreign receivables a more secure and ‘bankable’ asset.
Gary Nuttall, President of Brampton, Ontario-based Gray Tools Canada Inc, was one of the first companies to try Trade Protect. Gray Tools ships hand tools of every size and kind by air, ocean and land, as well as provides supporting services such as logistics consulting, and documentation.
When Nuttall received a call from a new customer from India requiring a shipment involving $30,000, he worried about not getting paid. “I called our regional EDC representative to see if there was anything they could do. He told me I could go to the EDC web site and get Trade Protect. For this account, the customer was not on the existing EDC buyer credit list, but within a couple of days or so, they were approved and we had coverage. Then we could breathe knowing we had insurance protection in the event our customer failed to pay. Subsequent to this, we also used Trade Protect for a customer in Europe and since the customer was already on the EDC’s credit list, we had approval within a day.”
EDC supports and develops Canada’s export trade by helping Canadian companies respond to international business opportunities. It provides insurance and financial services, bonding products and small business solutions to Canadian exporters and investors and their international customers.