Receivables Credit Put Option

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When credit insurers don’t want the risk, talk to us about a Receivables Credit Put Option (AR Put)

Your biggest customers are denied coverage from your credit insurer. What do you do?

On one hand, you can accept a scaled down version of your policy and assume the risk yourself on the accounts that weren’t approved. On the other hand, you can buy a credit put option (AR Put) to compliment your policy to cover unapproved accounts instantly, with 100% coverage, instant contract execution, and peace of mind knowing you’re fully protected.

Up until now, companies had little choice but to accept the reduction of credit limits and outright denials on key customers by credit insurers.  Fortunately today, the use of receivables put options level the playing field allowing formerly denied accounts the opportunity to be credit approved.

An accounts receivable credit put option (AR Put) is a simple contract between the seller (supplier) and the credit put purchaser (financial institution, private equity, or hedge fund). The supplier pays premium for specified receivables during the contract period. If the supplier’s customer files bankruptcy, the credit put option or AR put is exercised and the supplier is paid 100% face value of the covered receivables.

  • No deductibles
  • No cancellations
  • No credit limit reductions
  • No need to insure entire portfolio
  • No customer notification

Consider the Benefits of a Receivables Credit Put Option (AR Put)

  • Indemnify your company against catastrophic bad-debt losses from unpaid invoices caused by bankruptcy
  • Protect precious cash flow and balance sheet strength
  • Relieve concentration risk
  • Reduce collections costs
The Bottom Line

A Receivables Put Option not only protects your profit, it guarantees you will get paid for what you
sell. Transfer the risk to another entity and please your shareholders.

What you buy is a Receivables Credit Put Option: what you get is peace of mind and profit protection.

Call Trade Risk Strategies today: 1-844-315-4985

 

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