Know-how

News

Launch event credit insurance blue line

Zurich, September 8, 2016

Kessler together with Tradeplus24 and AIG Europe announced the launch of a new solution combining credit insurance with financing. It is the first solution in Switzerland providing protection against buyer default and working capital in one easy to use package. The credit insurance blue line is part of the Kessler blue line framework agreements and is designed for smaller to medium sized export orientated Swiss companies.

Kessler realizes that the export environment in Switzerland is more and more demanding. Traditional markets, such as the Eurozone are suffering. Many buyers are demanding longer payment terms in part to compensate for the stronger Swiss Franc. This results in the double challenge of expanding into new markets, and increased working capital needs at the same time. New markets mean higher risk of buyer default, and increasing unsecured working capital lines is difficult given today’s environment.

SMEs are finding it more difficult to secure working capital finance from their traditional banking relationships, given the regulatory and capital pressure on the banks. And export orientated Swiss companies depend on credit insurance, but traditional credit insurers are appearing increasingly reluctant to provide the cover needed. Kessler’s credit insurance blue line is a simple way to provide credit protection and give access to working capital in one package.

The credit insurance blue line uses state of the art technology to automatically download the accounts receivable book, to analyze the portfolio and to confirm, in real time, which invoices and buyers are insured. The coverage is secured by AIG Europe, the selected insurances carrier for the facility. Tradeplus24, the manager of the lending facility, will automatically provide funds secured against the insured accounts receivable portfolio. Using the credit insurance the exporter has created a valuable asset which is used as security for the financing. The whole process is underpinned by an advanced IT platform which reduces manual input to a minimum giving Tradeplus24 the confidence to lend directly secured against the insurance policy. Unlike factoring, the accounts receivable administration and customer relationship remains with the exporter, invoices are not purchased but assigned and, the finance line remains in place as long as the security remains in place.

Back to top
Marsh Network