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Technology and trade credit insurance: Protecting your business

In recent years, the evolution of technology has rapidly accelerated, from AI opportunities to cybersecurity risks. The number of new technology companies incorporated in the UK increased by 22% in 2022, with a total of 46,474 tech businesses established, up from 38,240 in 2021.1

Technology can also help the UK address many challenges. This includes labour shortages, supply chain disruption, turbulent energy markets and the long-term economic effects of Brexit. IT outsourcing has a projected market volume of £27.30 billion in 2023, while the average spend per employee in the IT Services market is projected to reach £2,040.2

But we’re in uncertain times. In 2023, thousands of businesses in England and Wales have gone bust. Insolvencies were up 10% from a year before in the three months to September 30.3

As businesses grapple with the risk of shutting down, some might struggle to keep up with their obligations to suppliers and may need to delay payments to handle their finances. In this situation, you might wonder how your technology business would get paid if a customer is in financial trouble.

You can get specialist trade credit insurance to protect your technology firm if you’re left with unpaid invoices.

What is trade credit insurance?

Trade credit insurance helps protect you against customers failing to pay invoices provided on a credit basis (where the buyer pays later).

However, it doesn't only help you operate when another company can't pay due to insolvency or lack of funds.

It can also accelerate your growth by safeguarding your cash flow. Plus, it could help your business to succeed when operating with unfamiliar customers.

Protecting your business

This insurance doesn't just protect your finances. It also gives banks and business partners peace of mind, knowing loans will be paid despite supply chain issues.

Plus, with this insurance, you can offer your loyal customers credit terms while keeping an eye on any insolvency risks. And when it comes to new customers, you can confidently approach them, knowing you won't have to lose sleep over late payments or insolvency concerns.

Dealing with unpaid invoices

According to government data, between 2021 and 2023, over 6,000 technology businesses have registered as insolvent. This is an increase of 1,322 compared to the previous 3 years, 2018 to 2020.4

Meanwhile, other research indicated that outstanding invoices and access to credit were problems for SMEs.5

Some businesses, especially smaller ones, expressed concerns about delayed invoice payments. Up to 28% acknowledged that issues with late payments had escalated between 2022 and 2023.

Non-payments and delays can have a massive impact on cash flow and business operations, which could put your business at risk.

Managing the risks

According to research from the UK’s leading insurance premium finance company, Premium Credit, the cost-of-living crisis has made it challenging for one in six SMEs (17%) to access credit. As a result, finding a technology company that provides attractive credit terms to potential new clients becomes incredibly appealing.5

While expanding your customer base, trade credit insurance gives you the confidence to pursue new business opportunities. This is particularly reassuring when engaging with relatively new customers. You can have peace of mind, knowing you’ll receive payment even in scenarios involving late payments or insolvency. This is a genuine concern amidst the numerous challenges technology businesses currently face.

Insolvency threats

According to official data from Companies House and Company Insolvency Statistics, there were 6,208 company insolvencies registered in England and Wales between July 1, 2023.3

Mounting financial pressures such as increased fuel and labour costs, higher inflation and interest rates are some of the factors blamed for the rise in the number of firms at risk of collapsing.6

The end of COVID-19-related loans and government support schemes, which kept many businesses afloat during the pandemic, also caused more corporate distress.7

The number of companies in England and Wales going out of business is set to be the highest since the 2009 financial crisis.

Risk management plays a pivotal role in the technology sector due to its high stakes. The pandemic underscored the world's heavy reliance on technology, enabling work-from-home, digital commerce, and social connectivity when physical mobility was limited.

Thriving in the tech industry means seizing innovation opportunities within a rapidly evolving market while effectively handling associated risks.


Trade credit insurance offers distinct benefits, particularly in the areas of risk mitigation, growth, and enhancing working capital. In summary, for businesses in the technology sector:

Risk Mitigation

  • Helps protect businesses against the default of their customers, reducing the risk of non-payment.
  • Can enhance credit management by offering insights into the creditworthiness of potential customers.


  • Helps facilitate business expansion by enabling technology companies to safely offer more competitive credit terms to new and existing customers.
  • Can increase confidence in exploring new markets or expanding the customer base without fear of significant financial loss.
  • Helps secure better financing terms from banks, as insured receivables are often viewed as more secure collateral.

Enhancing working capital

  • Helps improve cash flow by protecting against late or non-payment, ensuring more predictable income streams.
  • Can lead to improved borrowing terms, as lenders may view businesses with insured receivables as lower risk.
  • Allows businesses to release capital as a buffer against bad debts, reallocating resources for growth and operational needs.

For more information about trade credit insurance, visit our trade credit page.

We will also be holding a trade credit insurance webinar in February, when leading industry experts will discuss the latest insights.

Join our upcoming webinar!

Join us on Wednesday 28 February at 10am and learn the strategies to reduce your credit risk and improve access to finance for growth.