DrOffig #10807

What are the factors that make Forte & Strong insurable, with a headline assessment of less than 3% chance of default, when it has a credit score of only 378, a high 7.44% chance of default and a high risk debt service ratio of only 0.12? It seems to be a high risk investment on those metrics, yet comes into Marketlend’s lowest risk assessment of >97%? This doesn’t seem to make sense. What are the mitigating factors?

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leotyndall #10809

Dear Dr Offig,

The risk is not on the seller of the invoices but the obligor of the invoices, that is the debtor. The debtor is insured and has a risk profile that meets the >97% whilst the seller is as you have pointed out a higher risk.

Other than delivery of services, the risk should be low on the seller because after he delivers the goods, it is the purely the obligation of the debtor that will be enforced and accepted.

If there is a shortfall on a claim against the debtor we will claim against the insurance and also the seller.

Kind regards,

Marketlend

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