Can Credit Insurers Help Factors to Grow the Market?
Initially, it seems that the trade finance departments of large banks, factoring companies and credit insurers are competing directly for the same business. Is a trade receivable financed by one of these lost for the others? All these people use the “trade receivables” between suppliers and buyers, (part of a supplier’s balance sheet), in order to offer services. These services range from credit risk management to finance and collection of the receivables. Those who have been in an MBA or management course know that substitutes are more dangerous than competitors. This is because substitutes work with a different cost base. However, the above product range does offer a substituting alternative. So who is competing with whom? Or can we all work together?
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Initially, it seems that the trade finance departments of large banks, factoring companies and credit insurers are competing directly for the same business. Is a trade receivable financed by one of these lost for the others? All these people use the “trade receivables” between suppliers and buyers, (part of a supplier’s balance sheet), in order to offer services. These services range from credit risk management to finance and collection of the receivables. Those who have been in an MBA or management course know that substitutes are more dangerous than competitors. This is because substitutes work with a different cost base. However, the above product range does offer a substituting alternative. So who is competing with whom? Or can we all work together?