Manufacturers extending net terms to distributors and retailers face significant non-payment risk that can devastate cash flow and profitability. With 24% more insolvencies in the UK manufacturing sector alone and US business bankruptcies rising 22.3% from 2023 to 2024, traditional trade credit insurance has become a common risk mitigation tool. However, modern B2B net terms solutions like ResolvePay eliminate the need for insurance entirely by guaranteeing upfront payment and assuming 100% of credit risk, transforming accounts receivable from your largest uninsured asset into immediate working capital.
Manufacturers who extend Net 30, 60, or 90 payment terms to distributors and retailers effectively become banks to their customers. This creates acute vulnerability when economic conditions deteriorate or individual customers face financial distress. The statistics are sobering: 87% of finance directors report that growing their businesses has become more challenging, while many B2B invoiced sales become overdue, creating severe cash flow strain.
When you extend net terms, you assume multiple layers of risk:
The financial impact is severe: with a typical 10% profit margin, a $200,000 bad debt requires generating $2 million in additional sales to recover. This illustrates why manufacturers view accounts receivable as their largest uninsured asset, representing up to 40% of company value.
Customer default creates cascading effects beyond the immediate lost revenue:
Days Sales Outstanding averages 72 days across B2B transactions, meaning manufacturers float significant capital while waiting for payment. This working capital gap often forces difficult choices between growth opportunities and financial stability.
Trade credit insurance is a risk management product designed to protect manufacturers from financial losses when customers fail to pay for goods or services delivered on credit terms. The policyholder (manufacturer) pays premiums to an insurer who then indemnifies losses from covered events like customer insolvency, protracted default, or political events.
The fundamental mechanics involve four key parties:
The process typically follows this sequence:
Trade credit insurance policies contain several critical elements:
The three largest carriers—Allianz Trade, Coface, and Atradius—control over 85% of global capacity. Coface alone monitors over 220 million businesses worldwide to assess credit risk.
Trade credit insurance premiums typically range from 0.1-0.5% of insured sales, with the total cost of ownership including multiple additional expenses that significantly impact protection value.
Premium calculations consider several risk factors:
For example, a manufacturer with $10 million USD in annual sales might pay around $20,000 USD annually in premiums at a 0.2% rate. This doesn't account for deductibles, co-insurance, or administrative costs.
Beyond premium payments, manufacturers should be aware of additional costs:
Understanding the full cost structure helps manufacturers evaluate whether trade credit insurance aligns with their risk management needs and budget.
The trade credit insurance claims process follows a structured framework that requires strict compliance and documentation.
The typical claims process involves several critical steps:
Claim processing timelines vary by insurer and claim complexity:
It's important to note that insurers typically don't cover payment disputes between buyers and sellers. As J.P. Morgan's Jason Benson explains, "If there's a receivable for 100 products, and the buyer says only 80 were delivered, the insurer's payment obligation may only be on the undisputed amount."
ResolvePay represents a fundamental shift from reactive insurance to proactive payment certainty, guaranteeing upfront payment and assuming 100% of credit risk. Unlike insurance that pays indemnity after waiting periods and deductibles, ResolvePay provides immediate cash flow while taking on the complete burden of credit assessment, underwriting, and collections.
ResolvePay's approach delivers comprehensive payment certainty:
This transforms the manufacturer's relationship with credit risk from defensive insurance to offensive growth strategy, enabling confident extension of net terms while maintaining immediate cash flow certainty.
ResolvePay's embedded payments approach aligns with the broader trend toward integrated financial services within B2B commerce platforms. By combining credit expertise, invoice financing, and payment processing into a single platform, ResolvePay eliminates the previously disparate resources needed to facilitate B2B commerce safely and efficiently.
The platform's AI-powered accounts receivable automation streamlines the entire net terms workflow from invoice to payment, reducing Days Sales Outstanding while enhancing customer relationships through consistent, professional credit availability. This represents a paradigm shift from risk mitigation to growth enablement.
ResolvePay's core value proposition centers on guaranteed upfront payment that transforms accounts receivable from illiquid assets into immediate working capital, eliminating the cash flow uncertainty that plagues manufacturers extending net terms.
The cash flow acceleration mechanism works as follows:
This eliminates the traditional 72-day Days Sales Outstanding cycle, providing immediate liquidity to fund operations, pay suppliers, and invest in growth.
ResolvePay's non-recourse financing structure provides complete risk transfer:
This contrasts with recourse financing arrangements that maintain manufacturer liability for customer defaults, creating ongoing financial uncertainty.
ResolvePay eliminates credit risk entirely by assuming the complete burden of credit assessment, underwriting, and collections management, allowing manufacturers to focus on core business operations rather than credit risk management.
ResolvePay leverages sophisticated credit assessment capabilities:
This sophisticated approach enables manufacturers to extend credit confidently to both established and new customers without internal credit management overhead.
ResolvePay functions as an outsourced credit department with comprehensive capabilities:
This comprehensive service allows manufacturers to offer competitive net terms while completely eliminating the administrative burden and financial risk traditionally associated with B2B credit extension.
ResolvePay delivers benefits that extend far beyond simple risk transfer, enhancing customer relationships and streamlining internal workflows through integrated automation and embedded payment solutions.
By providing dedicated credit lines to buyers, ResolvePay enhances purchasing power and drives sales growth:
This creates a virtuous cycle where enhanced buyer purchasing power drives manufacturer revenue growth while maintaining immediate cash flow certainty.
ResolvePay's integrations with financial tech stack streamline operations across the entire B2B commerce ecosystem:
This embedded approach eliminates manual data entry, reduces errors, and provides comprehensive visibility across the entire accounts receivable lifecycle, transforming a traditionally manual, error-prone process into an automated, efficient workflow.
ResolvePay represents a comprehensive payment certainty solution for manufacturers meeting specific eligibility requirements and business objectives.
ResolvePay is particularly beneficial for manufacturers who:
The solution is especially valuable for manufacturers with $1M+ in annual B2B revenue who need comprehensive risk protection with immediate payment certainty.
ResolvePay has specific eligibility requirements:
To get started, manufacturers can access free business credit checks to evaluate customer portfolios and determine appropriate credit limits. The platform's flexible integration options ensure compatibility with existing business systems, enabling rapid implementation and immediate cash flow benefits.
Manufacturers extending net terms face a critical decision: how to protect against credit risk while maintaining growth momentum and healthy cash flow. Trade credit insurance serves specific needs for businesses requiring protection for large international buyers or political risk coverage. This traditional approach involves premiums, deductibles, waiting periods, and claims processes that work within established insurance frameworks.
ResolvePay offers a fundamentally different approach—guaranteed upfront payment with complete credit risk assumption. By providing 24-hour advance payment of up to 100% of invoice value combined with non-recourse financing, ResolvePay transforms accounts receivable from an uninsured asset into immediate working capital. The platform's AI-powered automation streamlines the entire net terms workflow while eliminating administrative burdens associated with credit management.
For manufacturers seeking to grow B2B sales while maintaining immediate cash flow certainty, ResolvePay delivers comprehensive payment protection, operational efficiency, and the confidence to extend competitive credit terms without internal risk constraints.
Trade credit insurance provides indemnity coverage after deductibles, waiting periods, and claims processing that can take weeks to months. ResolvePay guarantees upfront payment of up to 100% within 24 hours with zero deductibles, assuming 100% of credit risk immediately upon invoice approval. This eliminates waiting periods and provides immediate working capital.
Yes, ResolvePay takes on billing, collections, and repayment risk entirely, allowing manufacturers to maintain customer relationships while ResolvePay handles professional payment reminders, collections management, and any necessary recovery efforts. This eliminates the administrative burden and relationship strain of internal collections.
ResolvePay requires $1M+ annual B2B revenue and serves manufacturers across various industries including construction materials, industrial supplies, food & beverage, automotive parts, and technology/electronics. The platform is particularly beneficial for manufacturers extending Net 30-90 terms to distributors and retailers.
Yes, ResolvePay offers built-in integrations with leading ERP, accounting, and commerce platforms including QuickBooks, Oracle, NetSuite, Sage Intacct, Shopify, BigCommerce, Magento, and WooCommerce. The platform's flexible APIs also enable custom integrations for specialized business requirements.
Non-recourse financing means all cash advances are yours to keep regardless of whether your customers ultimately pay their invoices. ResolvePay assumes 100% of the credit risk, eliminating your liability for customer defaults and providing complete cash flow certainty without future repayment obligations or balance sheet impact.
This post is to be used for informational purposes only and does not constitute formal legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Resolve assumes no liability for actions taken in reliance upon the information contained herein.