SMEs have been urged to open up to credit insurers, with 1,300 IT firms set to benefit from at least £2bn of extra cover from Atradius.
The credit insurer’s UK country manager Pete Davies told CRN his firm has been increasing exposure since October. The underwriter will be flooding UK Plc with an extra £2bn-£2.5bn during the coming weeks.
“Buyers that were previously off-cover will come back on-cover,” he said. “Ever since the withdrawal processes that affected the market, we have gathered information from buyers to recalibrate our database.”
He said the increased exposure will help 1,300 companies in the IT sector and that the initiative will be of particular benefit to SMEs seeking cover of up to £75,000.
Davies assured channel firms that the aggressive withdrawals of the past 18 months were a thing of the past and said exposure is at its highest level in two years.
“No cover will be pulled without a 30-day notice period,” he added.
But Davies stressed that SMEs need to show increased candour. “Being silent is not a neutral position,” he said.
He claimed Atradius gave the green light to four in five smaller firms seeking extra cover and asserted that an impressive top line may not be important.
“You might think your figures are not too good, but pretty much everybody had a worse year for sales [last year]. We are looking for other things,” he said.
“It is not only cash flow, it is what your product looks like, your future, your management approach. It is about breaking down the barriers of trust.”
Nitin Joshi, founder of ChannelMoney, welcomed the extra credit, but said insurers have to follow through with their promises.
“The acid test is what happens when a VAR applies for that extra credit. In the end, it is about specific credit risks,” he said.
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