In light of recent developments at CIT Group, one of the largest credit protection providers in the U.S., it is clear that there must be alternatives to traditional methods of trade credit protection. In today’s economic environment, it is simply insufficient to ask a potential customer for a credit application up front, check a few references, and fail to stay on top of an ongoing review.
That’s why FTRANS is migrating its customers to an innovative credit scoring model. This model uses front-end credit data to qualify a small business’s B2B customers, eliminating the need to purchase blanket insurance on all of a business’s trade credit. This strategy, similar to how B2C companies issue individual credit checks prior to extending personal credit, enables small businesses to make better- informed decisions on which customers are worthy of trade credit.
“In today’s economic environment, it is simply not enough to ask customers for a credit application up front and check a few references,” said Dan Drechsel, CEO of FTRANS. “At FTRANS, we’ve developed a model to help our customers determine the creditworthiness of their buyers. Small businesses need stability now more than ever and using a credit policy based on solid credit information is one way they can insure themselves without entirely relying on a third party.”
And FTRANS clients like it.
“We switched to a credit scoring model because we can’t afford to take a hit from bad loans and there’s no guarantee our credit will be fully insured by third-party lenders that may not be able to withstand the recession themselves,” said Mark Wecker, CFO of Southland Graphics. “FTRANS’ credit scoring policy is a simple, precautionary step I can take to ensure that I’m working with the right customers and protecting my business.”