MC Healthcare Hero banner

Trade credit: Fuelling growth and innovation in the health & care sector

The healthcare sector is poised for continued transformation driven by several key factors, including:

  • The evolution of innovative technologies - The Digital Health market in the UK is estimated to reach $4.68 billion by 2025.1
  • An ageing population - The UK's population aged 65 and over is expected to increase by 8.6 million by 2050, indicating the potential for healthcare demand.
  • Persistent economic uncertainty -  GDP growth rate of 0.4% in 2023 is expected to drop to 0.3% in 2024 and increase only slightly to 0.7% in 2025.2

These factors present challenges and promising opportunities for the healthcare industry, which is expected to grow by 2.8% annually from 2020 to 2025.1 To navigate this evolving landscape, businesses in the healthcare sector may increasingly rely on trade credit as a crucial financial tool to manage cash flow and sustain growth in uncertain economic times.

Driving change in health and care

One of the most influential drivers of change is artificial intelligence (AI). From revolutionising drug development and patient care to transforming healthcare business and commercial aspects, AI's emergence is at the forefront of many sectors, including healthcare.

The UK Government is investing £100 million to accelerate the use of AI in life sciences to tackle the most significant health challenges. This will target areas where rapid deployment of AI has the greatest potential to create transformational breakthroughs in treatments for previously incurable diseases.3

Equally powerful is the shift toward prioritising preventive over reactive healthcare. This strategic shift aims to mitigate the strain an ageing population could place on healthcare systems worldwide. It offers a more proactive approach to managing the evolving healthcare needs of society.4

As the demand for healthcare services continues to rise, so does the need for sustainable growth and innovation within this sector. One essential but often overlooked factor contributing to the growth of healthcare organisations is trade credit.

The role of trade credit in health and care

Trade credit is a financial arrangement in which suppliers extend credit to their customers, allowing them to purchase goods or services with delayed payment terms.

Trade credit is crucial in the health and care sector for several reasons.

Hospitals, clinics, and long-term care facilities require constant medical equipment, pharmaceuticals, and other essential supplies to provide high-quality care. Many of these items come with substantial price tags. Trade credit enables these organisations to acquire the necessary supplies without immediate cash payments, ensuring the uninterrupted delivery of healthcare services.

Moreover, trade credit promotes collaboration within the healthcare supply chain. Suppliers can offer favourable credit terms to customers to encourage long-term relationships and reliable partnerships. This collaboration fosters innovation and efficiency as suppliers work closely with healthcare providers to meet their unique needs. This can lead to cost reductions and improved quality of care.

The healthcare sector faces constant challenges, including changes in patient demand, evolving regulatory requirements, and advancements in medical technology. Trade credit provides healthcare organisations with the flexibility to adapt to these challenges. It allows them to strategically allocate their financial resources, whether investing in new medical equipment, expanding facilities, or adjusting staffing levels. This adaptability is crucial for maintaining resilience and growth.

Additionally, trade credit supports research and development in the health and care sector, helping to advance medical science and patient care. Many medical innovations and breakthroughs require substantial investments in equipment, materials, and clinical trials. Trade credit allows research institutions and pharmaceutical companies to access these resources on credit terms, facilitating the development of new treatments, medications, and medical devices.

Protecting your business

Trade credit insurance helps safeguard you against the financial risks associated with non-payment of invoices provided on a credit basis by customers or partners. In this sector, where services and supplies are critical, delayed or defaulted payments can disrupt your business operations, compromise patient care, and strain resources.

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

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 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 they won't have to lose sleep over late payments or insolvency concerns.

Insolvency threats and dealing with unpaid invoices

Non-payments and delays can have a massive impact on your cash flow and business operations, which could put your business at risk in an industry where reliability and uninterrupted care are paramount.

The Department for Business and Trade5 estimates between 2020 and 2023, the business population decreased by 425,000 (7.1%); according to official data, there were 6,208 company insolvencies registered in England and Wales between July 1, 2023.5

Trade credit insurance provides a safety net by covering losses due to insolvency, payment defaults, or political events. It allows health and care organisations to ensure continuous service delivery, maintain financial stability, and invest in vital resources without fear of financial setbacks.


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


  • Can facilitate business expansion by enabling 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.

What you can do

We can organise trade credit insurance cover that suits your health and care business.

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.