Rising Nonpayment Risk: What Lenders Need to Know

Rising Nonpayment Risk: What Lenders Need to Know 

Insolvencies are rising. Payment terms are stretching. And for lenders, that means one thing: default risk is increasing. 

At Securitas Global Risk Solutions, we’ve been watching this trend unfold across industries, and believe trade credit insurance is the ideal solution for the asset-based lending and factoring community to help reduce risk.

Explore our trade credit insurance solutions. 

According to Allianz Trade’s Global Insolvency Report 2025, global business insolvencies are forecast to rise another 6% this year and 3% in 2026, driven by pressure on consumer demand, interest rate strain, and a contraction in working capital availability. 

Credit Risk Is Reappearing in Plain Sight 

From construction and retail to commodities and logistics, sectors are increasingly under pressure. Here’s what we’re seeing: 

• More supplier defaults triggering nonpayment issues for otherwise strong companies. 
• Increasing demand for coverage in the U.S. middle market, especially from manufacturers and wholesalers. 
• The conversation is changing. Lenders are asking tougher questions about the health of their borrower’s customers, and insurers are responding with more rigorous underwriting. 

Our guide to trade credit insurance explains how these policies protect receivables. 

How Trade Credit Insurance Fits the Picture 

Trade credit insurance (also known as accounts receivable insurance) is no longer a niche product. For lenders, it’s a strategic risk transfer tool: 

• Loss payee structures ensure insurers pay directly to lenders in the event of nonpayment. 
• Named buyer coverage protects against defaults from a borrower’s largest customers. 

We’ve seen more ABLs and non-bank lenders leverage policies as collateral enhancement, improving advance rates while reducing overall risk. 

Understand how trade credit insurance supports lender protection. 

Benefits of Trade Credit Insurance for Lenders 

• Improved collateral coverage on receivables 
• Better visibility into borrower customer credit risk 
• Loss mitigation through claims payment in default 
• Fraud detection support during buyer vetting 
• Higher confidence in advance rate decisions 

Learn how we help lenders protect receivables and grow securely. 

Watch: How Trade Credit Insurance Protects Lenders

In this brief video, we explain how accounts receivable (trade credit) insurance works, and why it’s becoming an essential tool for lenders to secure growth while minimizing risk.

Conclusion: Be Proactive, Not Reactive 

Rising nonpayment is more than a headline, it’s a growing drag on borrower performance and lender stability. But with the right tools in place, it’s manageable. 

Trade credit insurance offers lenders a way to stay ahead of the risk curve while offering greater flexibility and confidence to their clients. 

Contact us today to learn how we can help protect your business. 

FAQ 

What’s the difference between borrower default and buyer nonpayment? 

Borrower default refers to a client failing to repay a loan. Buyer nonpayment refers to that client’s customers failing to pay invoices, something that can affect your borrower’s ability to repay. 

Can lenders be named as beneficiaries on trade credit insurance policies? 

Yes. Loss payee and assignment of benefits structures are common in lender-arranged policies. 

Is trade credit insurance useful for factoring companies? 

Absolutely. It protects the receivables being purchased and can be a key differentiator in client acquisition. 

Explore our guide to trade credit insurance. 

Disclaimer:

This blog post is meant to be informative and provide helpful tips and insights into credit insurance policies.  It is not meant to supersede any policy requirements.  Please consult your credit insurance policy for all requirements including claim filing deadlines and required documentation.

Since 2004, Securitas Global Risk Solutions, LLC (“Securitas”) has helped clients develop credit and political risk transfer solutions that provide value on numerous levels. As an independent trade credit and political risk insurance brokerage, Securitas is focused on developing comprehensive solutions that meet the needs of clients, ensuring a complete understanding of policy wording and delivering excellent responsive service.