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- An Advantage of Purchasing Credit Insurance
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An Advantage of Purchasing Credit Insurance
If a company has purchased credit insurance, that company's ability to borrow against its accounts receivable may be enhanced. Many companies use their accounts receivables as collateral to borrow from financial institutions. Purchasing credit insurance is one way to obtain funds easily and more quickly. Purchasing credit insurance may also lower the cost of borrowing because the risk to the financial institution (the lender) is lower.
© 2011 by Michael C. Dennis. All Rights Reserved. Michael is the author of "Credit and Collection Handbook."