Credit insurance gurantees a lender gets repaid in the event of a borrower not being able to pay.
For example, a factoring company requires a business to carry credit insurance on its top three customers before advancing funds against their invoices, protecting both parties in case those customers become unable to pay due to insolvency.
Why it matters: It protects the business from catastrophic losses if a major customer defaults, and allows the company to safely offer better terms to buyers.
.avif)
.svg){kind=small}