Credit Insurance
Credit Insurance covers the risk of non-payment of invoices between two legal entities. The risk can be a commercial risk (linked to the situation of the buyer) or a political risk (linked to the country of the buyer).
After signing the credit insurance policy, the first thing to do is to establish cover on all your customers, by applying to the insurer for a credit limit. The credit limit issued is the amount the credit insurer is willing to insure for a particular customer.
Once the credit limit is set, you can invoice your customer and the debt is covered by the policy. After the due date of the invoice you have, according to the general and specific conditions of the policy, a first well-defined period to chase the payment of the invoice by your own methods. If your actions are unsuccessful at the end of this first period, the credit insurer will take over the debt collection from you. Whether the insurer is successful or not, you will be indemnified at the insured percentage, after the waiting period (provided the terms and conditions of the policy have been met).
You can transfer the benefit of your credit insurance policy to a third party (generally a bank). Having your receivables protected against the risk of non-payment, will guarantee the third party that your customers insolvency will not affect your own position. Transferring the benefit of the policy is often used to get extra financing from the bank.

Factoring
Factoring adds extra features to the cover of the risk of non-payment and the debt collection service. The factor company will follow up the incoming payments as soon as the invoice is due and in most cases will also provide the pre-financing of the insured invoices.

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Debt collection
Debt collection services help to ensure that your customers pay their invoices promptly.