Bank loan collateral

“I want to use my trade receivables insurance policy as a collateral for a bank loan.”

Is your company applying for a business development loan at a bank? Trade receivables insurance agreement can be successfully used as a collateral for a bank loan.

The insurance against the risk of non-payment by foreign or domestic buyers enables your company to assign rights to any future indemnity under the insurance agreement to a bank. The assignment of these rights can be utilised as collateral for bank loan. Additionally, the very fact that a company holds a trade receivables insurance policy positively affects the assessment of the creditworthiness performed by a bank, as it shows that your company has a receivables management system in place.

The assignment of rights from an insurance agreement can also be used as factoring collateral.

How does it work?