Small and medium-sized enterprises (SMEs) are the backbone of the economy, but today they face a uniquely challenging landscape. Economic uncertainty, interest rates, regulatory changes, and increasing costs are just some of the barriers holding back business growth. On top of this, high rates of insolvency and the risk of unpaid invoices by customers add further pressure.
The balancing act: How UK businesses are fuelling growth and navigating risk in uncertain times
A recent Marsh survey of 500 finance directors and 500 sales leaders looked to uncover how businesses are navigating these conditions. The survey results formed our new report ‘The Balancing Act’. In our report, 87% of finance directors say growing their businesses in the past year has been more difficult than ever before.
Our report also revealed that by utilising trade credit as a tool for growth, many businesses are increasing their exposure to credit risk. Revenue continuity is being prioritised over strict credit risk discipline as businesses extend more generous credit terms to customers who may be struggling with cash flow. While this can help maintain sales and attract new customers, it also increases exposure to credit risk. This leads to higher collection costs, especially when outsourcing debt collection.
Many businesses employed third parties to help with collection. The estimated average cost of collections per year by industry was:
- £345,000 for the food and beverage industry
- £352,000 for manufacturing
- £523,000 for tech businesses.
Tech companies rely heavily on trade credit insurance offers to support their financial management. Furthermore, 100% of finance directors surveyed from this sector said they outsource collections which is costing them significantly more than businesses in other sectors.
Trade credit insurance enables companies to maintain healthy cash flow and provides financial protection against late payments and protracted default. It also helps businesses make informed decisions by assessing the credit worthiness of their clients and protecting their whole turnover from the domino effect of unpaid debts. This support from insurers is crucial for SMEs aiming for long term success in a volatile market.
How businesses are navigating the tightrope
In an economy where insolvency and non-payment risks are high, it’s essential for businesses to manage their trade credit risk carefully. This means:
- Implementing stricter credit assessments
- Setting appropriate credit limits
- Monitoring risk closely
- Improving operational efficiency through digital transformation.
We’re here to support you with risk management as well as your insurance solutions. Speak to our team about how we can help strengthen your risk management strategy to ensure your business remains resilient. This gives you the confidence to pursue growth opportunities and maintain financial stability.
Business leaders surveyed overwhelmingly agree that trade credit insurance is essential in the current climate. It’s the vital safety net that allows businesses to deal with more customers without taking on an unreasonable amount of risk. Trade credit insurance has evolved significantly in recent years, in response to the needs of businesses. Now, it offers opportunity as well as protection. For example, trade credit insurance can be used to optimise working capital without incurring significant operational overheads in areas like credit risk assessment and credit control. It can also be used to help a business gain the finance they need to invest in growth. This is especially true if you're working with a global leader in the industry who understands the nuances of the waiting period and agreed terms that protect your interests.
Marsh Credit Plus: Bespoke trade credit insurance for small businesses
Any supplier of goods and services that trades on open credit terms and has an annual turnover of up to £15 million can benefit from a Marsh Credit Plus policy. If a customer fails to pay for goods or services provided, trade credit insurance covers the resulting bad debt, helping to protect cash flow and balance sheets.
Marsh Credit Plus goes beyond traditional trade credit insurance. We offer flexible coverage options, simplified application processes, and expert support designed to meet the needs of growing SMEs.
With Marsh Credit Plus, SMEs benefit from:
Comprehensive Coverage: Protection against non-payment, insolvency, and political risks, helping you trade confidently both domestically and internationally.
Flexible Terms: Coverage that adapts to your business size and sector, ensuring you only pay for what you need.
Streamlined Process: A straightforward application and claims process, minimising administrative burden so you can focus on running your business.
Expert Guidance: Access to our experienced team who understand the UK SME landscape and can provide tailored advice and risk management support.
Marsh Credit Plus empowers SMEs to manage credit risk effectively while maintaining the agility to seize new business opportunities. It’s designed to give you peace of mind, knowing that your business is protected against the financial impact of customer non-payment.
The industries leveraging trade credit insurance
Trade credit is more often associated with sectors like manufacturing and construction. However, the professional services industry also faces payment risks. Our survey results revealed professional services often rely on large and concentrated contracts – yet just 62% had trade credit insurance. This adoption rate was low when compared with other industries. Sales leaders in manufacturing are especially likely to take advantage of trade credit insurance, with 80% in this sector saying they are covered. Any business trading on credit terms, regardless of industry, need protection against the risk of non-payment.
The balancing act of extending credit and credit management for SMEs
Navigating the current economic climate requires a careful balancing act. SMEs must weigh the need to extend credit to support customer relationships and growth against the risks of non-payment and insolvency. Sales leaders remain hopeful that the economy will positively impact growth, particularly if they have a trade credit insurance policy in place. Insurance, especially enhanced solutions like Marsh Credit Plus, is a key part of this balancing act. It enables businesses to manage risk while seizing opportunities.
If you’re an SME looking to safeguard your business against credit risk and unlock growth potential, trade credit insurance is a very smart choice. Marsh Credit Plus offers enhanced protection and support tailored to your needs.
Contact the team today to learn more about how our risk management and trade credit insurance solutions like Marsh Credit Plus can support your business. Our friendly, professional team is ready to discuss your specific requirements. We'll help you find the right coverage to keep your business secure and thriving.
Download the report now
Download the full report ‘A balancing act: How UK businesses are fuelling growth and navigating risk in uncertain times’.
The research was conducted by Censuswide, among two samples:
Sample 1: 500 Finance Directors and Credit Managers (aged 18+) working in UK businesses with a minimum turnover of £20 million, a company size of 50+ employees and targeting those who engage in B2B sales. The data was collected between 14.02.2025 – 27.02.2025.
Sample 2: 500 Sales Leaders (DMs) (i.e. CROs, Sales Directors and equivalent) (aged 18+) in UK businesses with a minimum turnover of £20 million, a company size of 50+ employees and targeting those who engage in B2B sales. The data was collected between 14.02.2025 – 27.02.2025.
Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct and ESOMAR principles. Censuswide is also a member of the British Polling Council.
