Government Supported Trade Receivables Insurance

Receivables Insurance is an opportunity offered to businesses that cannot obtain the receivables they are entitled to as a result of their commercial activities. Commercial Credit Insurance offered with government support; helps business owners reach a large part of their receivables without any problems. Thus, SMEs are prevented from having problems if commercial customers do not pay.

What is Credit Insurance?

Receivables Insurance, implemented by the Ministry of Treasury and Finance, is a new type of insurance and offers extremely important advantages to SMEs. Specially designed for micro and small-scale SMEs, the government-supported Credit Insurance protects you from facing serious financial crises by preventing problems in the cash flow of companies.

• The new State Supported Receivables Insurance model created by the Ministry of Treasury and Finance guarantees the receivables of SMEs.
• With this insurance, if SMEs cannot collect their receivables, a significant part of their receivables will be covered by the State Supported Receivables Insurance Pool
• Guarantee is offered to micro and small-scale SMEs as a result of risk assessment.
• Operational processes are carried out by the Extraordinary Risks Management Center appointed within the framework of Article 33/A of the Law No. 5684. The IT infrastructure to manage the transactions will be established by the Insurance Information and Monitoring Center.
• Within the scope of the system, guarantees will be provided for sales with a term of up to 120, 180, 240 or 360 days.
• SMEs will be able to access information on premium and coverage amounts from the scoring system, infrastructure of which is provided by SBM.

What Does Credit Insurance Do?

SME Receivables Insurance, which is among the most important types of government-supported insurance, allows you to make plans for the future while keeping your cash flow safe. Government-supported Commercial Receivables Insurance, which minimizes the risks you may encounter in your commercial activities, also prevents you from delaying the payments you need to make.

• Protects against the risk of non-payment of commercial debts.
• It allows you to manage the risks in your commercial activities in the most reliable way.
• Prevents unpaid receivables on the specified date after the forward sale from causing distress to the companies and disrupting their cash flows.
• It ensures a healthy cash flow and enables companies to fulfill their commitments comfortably.
• It eliminates the disruptions in the future financial plans of the companies.

Receivables Insurance General Conditions

Companies that make Receivables Insurance receive the request of the company that wants to take out insurance and make a risk assessment. In this process, the company's turnover and long-term receivables are examined. The operational processes of the trade and export Credit Insurance options offered according to the infrastructure scoring process created by SBM are carried out by the Special Risks Management Center.

How Does Credit Insurance Work?

In order to benefit from Receivables Insurance, it is sufficient that the grievance situations specified in the policy arise and you document this. Companies that make Receivables Insurance make the necessary examination after you submit the sales contract you have made with the company you expect payment, the invoices subject to the sale and the documents related to your bank account activities, and in case you have the right to pay, a part of your receivables will be paid to you by Orym, not by your insurance company.

How to Get Credit Insurance?

• Companies wishing to purchase receivables insurance can apply through Allianz Insurance Authorized Agency or Yapı Kredi Bank branches.
• Allianz Insurance issues a credit insurance policy after the claim is approved after financial reviews.

The net premium to be paid and the maximum coverage amount are calculated on the basis of the following table based on the turnover obtained from forward sales.

EXAMPLE:

An SME with a term sales turnover of 4.500.000 TL wants to insure its receivables of 3.500.000 TL in total arising from its sales with a term of up to 180 days to 10 buyers.

Since the SME's turnover from credit sales is 4.500.000 TL and the maturity of its receivables is up to a maximum of 180 days, the premium rate to be applied based on the table is 0.70%.

In this case, the premium amount to be paid by the SME is calculated as 31,500 TL (4,500,000 x 0,70%). Expense Tax (at the rate of 5%) will be added to this amount. The maximum compensation amount he can receive in return for this amount he will pay will be 315,000 TL (31,500 TL x 10).

Coverage of Credit Insurance

Within the scope of GOVERNMENT SUPPORTED COMMERCIAL RECEIVABLE INSURANCE FOR SMALL AND MEDIUM-SCALE BUSINESSES, only commercial receivables arising from domestic sales are guaranteed.

SCOPE

GOVERNMENT SUPPORTED COMMERCIAL RECEIVABLE INSURANCE FOR SMALL AND MEDIUM-SCALE BUSINESSES Among the enterprises defined as micro and small enterprises in the Regulation on Definition, Qualifications and Classification of Small and Medium-Sized Enterprises, which was put into effect with the Council of Ministers Decision dated 19/10/2005 and numbered 2005/9617. It is presented to those who meet the risk assessment criteria determined by the Extraordinary Risks Management Center, which was established at least two years ago as of the date of application and was appointed within the framework of Article 33/A of the Law No. 5684.

INQUIRY FEE

The inquiry fee at the proposal stage for the risk assessment to be made in order to determine the buyers to be covered under the GOVERNMENT SUPPORTED COMMERCIAL RECEIVABLE INSURANCE FOR SMALL AND MEDIUM-SCALE BUSINESSES is 10 TL for each buyer whose risk assessment has been made. The additional inquiry fee in the event of an insurance contract is 10 TL for each buyer whose risk assessment is made.

BIM AND MAXIMUM GUARANTEE AMOUNT

In the premium account, the turnover of the business requesting credit insurance from forward sales in the last financial year is taken as a basis. Net premium and maximum coverage amount is calculated based on the turnover obtained from forward sales.

BONUS COLLECTION

The entire premium amount is paid in advance with a 10% discount.

RISK ASSESSMENT

Concerning the buyers to be covered under the GOVERNMENT SUPPORTED COMMERCIAL RECEIVABLE INSURANCE FOR SMALL AND MEDIUM-SCALE BUSINESSES, the buyers who make up at least 50% of the turnover of the business requesting the insurance and are ranked from largest to smallest according to their turnover are taken into consideration. As a result of the risk assessment, each of these buyers is given a score between "1 (lowest risk)" and "6 (highest risk)".

LOAN LIMITS

Buyers with a score of 6 as a result of the risk assessment will not be provided with a credit limit within the scope of GOVERNMENT SUPPORTED COMMERCIAL RECEIVABLE INSURANCE FOR SMALL AND MEDIUM ENTERPRISES. Each buyer with a score between 1 and 5 is provided with a credit limit, not exceeding the maximum amount determined according to the turnover of the business demanding credit insurance. The total credit limit provided to all buyers of the insurance claiming company, excluding those who constitute at least 50% of the turnover from forward sales, is the highest credit limit provided to a buyer in the other 50% group.

COVERAGE RATE AND EXEMPTION

The coverage rates applied for buyers whose credit limit is provided within the scope of GOVERNMENT SUPPORTED COMMERCIAL RECEIVABLE INSURANCE FOR SMALL AND MEDIUM-SCALE BUSINESSES are specified in the policy. Coverage rates can vary between 70% and 90%, depending on the buyer's score.

Damages occurred during the insurance period; If the loss is less than 2,500 TL, it is paid by the insured, if it exceeds 2,500 TL, it is paid by the Extraordinary Risks Management Center, which is assigned within the scope of the specified coverage rates, within the scope of Article 33/A of the Law No. 5684.