Credit insurance problems
Published: 10 Jul, 2019
Most suppliers of hides work with some sort of payment cover policy. Those working with Far East tanners usually work using a bank letter of credit, some also adding a 30% deposit to this. Those that supply to the major European tanners usually sell against a credit insurance policy. One commentator has reported to theSauerReport that not only have premiums for their credit insurance policies increased recently, but cover has also been withdrawn or reduced on some of the main tanners in Italy. This is caused by one of two reasons, either a particular tanner has posted poor recent financial results causing the insurance company to become nervous. Or it could be the complete opposite with the tanner doing better than most and therefore in a position to buy where others can’t. The downside to this, as a supplier, is that if all other suppliers want to use the same healthy tanner, then the available financial credit cover is quickly used up. Whatever the scenario it is not advisable to trade without cover. Credit insurance is the life blood of the industry, without it we rely on trust alone!
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