Credit Insurance

A large percentage of mercantile business transacted is on credit for terms which vary from ten days to six months, or more, according to the class of trade. The amount of credit extended to individual debtors is generally based upon the estimated capital and credit rating of the corporation, firm or individual, indicated by a Mercantile Agency in its published books or reports. The outstanding accounts receivable range in value from 10% to 25% of a merchant's annual business. For such accounts he usually has nothing more than the acknowledged obligation Of the debtor for the open account, or his promise to pay in the form of a note, always subject to the honesty and ability of the debtor to pay.