Pre-Bankruptcy Put Options
Your company supplies product to a well-known (or not so well-known) customer. You have serious concerns that your customer may file for bankruptcy or liquidate. Your customer’s outstanding accounts receivable balance with your company is significant.
You buy ETG’s Pre-Bankruptcy Put Option, to secure your at-risk receivables for a period of time, e.g. 9 months. Your company continues shipping product and collecting payment on outstanding accounts receivables. If your customer files for bankruptcy during the period of time for which you purchased protection, ETG will cover 100% of your protected accounts receivable.
ETG's Pre-Bankruptcy Put Options provide protection on accounts on a single-account, non-cancelable basis.
With respect to the substance of Put Options, many credit professionals are somewhat versed in more common alternative forms of credit-risk mitigation, such as Factoring and Trade Insurance (see below).