Credit insurance, Business credit insurance, accounts receivable insurance, bad debt insurance, credit risk insurance

Business to Business Solutions
A White Paper from Global Commercial Credit

Eliminating the Credit Risk in B-to-B Online e-Commerce

Is Credit Risk a Potential Constraint?

The Problem
It comes as no news that business to business e-commerce is the direction virtually every industry is heading. While the web can certainly facilitate connections between potential buyers and sellers and improve the cost efficiencies versus traditional methods, one critical aspect of each deal is still unaddressed - until now.

When a buyer and seller connect on line, someone still needs to perform a normal credit evaluation. The seller's objective is not just to make a quick sale, they need to know they will be paid for the product they sell. Further, as e-commerce is new to most decision makers, there is the added perception of increased risk in extending competitive open credit terms on a high volume of transactions to numerous customers the business has possibly never sold to before and may know nothing about.

The need to step back from the transaction and conduct a traditional credit review combined with the fear of losses poses a substantial barrier to the growth of exchange portal activity. While some portals provide quasi-credit reviews of buyers when they register, and there are credit scoring models that can be used to help speed up the decision process, ultimately, someone in the transaction is going to take the credit risk, or the entire transaction process will be slowed to evaluate the risk before approving the deal.

There is little doubt that if the risk of bad debt losses could be eliminated from these exchange transactions, volume would increase dramatically. It would be safe for new market entrants to post their product on the web and know that they will be paid for what they sell.

The Solution
Enter Global Commercial Credit. In conjunction with our insurers, we are offering a risk management program that is custom tailored for the exchange portal environment.

Program Benefits
	The program eliminates the risk of unexpected credit losses.
	It allows the exchange to offer sellers a more secure trading environment resulting in increased transaction volume.
	The guarantee of payment eliminates the need for the transaction to be slowed for credit review purposes.
	It also saves the exchange time and expense of the credit due diligence process.

Features

The program is managed by Global Commercial Credit posing minimal additional administration burden on the part of the portal management.

All of the credit underwriting is conducted by the carrieroes industry analysts eliminating the due diligence burden on all parties.

The cost of the program is assessed as a fraction of the individual transaction cost and is easily absorbed by the transacting parties.

Program Mechanics

The workings of the program are extremely simple:

The program agreement is written to the exchange site.
New buyers register with the exchange prior to being permitted to conduct transactions. In the registration process routine credit information is gathered - bank and trade references - and the buyer is asked to request a specific credit limit that they would like to have approved for transactions on the site. This would be an aggregate credit limit for all transactions vs. a per deal limit.
The buyer is issued a digital certificate for use in shopping on the site.
They are then free to conduct transactions with various sellers up to their approved credit limit at which point, they are either put on hold until their limit is increased or they pay the balance down.
Should a loss occur, a one page notification of claim form would be filed with Global Commercial Credit, including invoices and proof of delivery and any other relevant supporting documents.
Claims would be processed and paid. The assigned receivables would then be released to the carrier so recoveries could be pursued.
The program would renew automatically on an annual basis.

Next Steps

Contact Global Commercial Credit to exchange relevant information and establish parameters for the program.

Secure a firm offer proposal - terms and conditions of the program.

Review and revise the offer as required.

Implement the program and start enjoying the benefits of Global Commercial Credit's unique eCommerce credit risk solution.

About Global Commercial Credit

Global Commercial Credit is the nation's only one-stop on-line credit insurance resource. As the nation's fastest growing credit insurance agency, Global Commercial Credit (GCC) strives to provide client's with access to the most creative, cost-effective solutions for domestic and international credit risk issues and related trade finance activities. GCC provides a complete range of innovative credit risk management tools and resources to help clients reach their business objectives safely. We have the experience, expertise and underwriting relationships to assure you the optimum solution for your unique needs, so look no further. Let GCC save you time and money!