Frequently Asked Questions

by sellers

INTRODUCTION

Who is Vesl?

  • We are a platform where businesses can get receivables financing secured by trade credit insurance.
  • We only serve B2B businesses for now.

PART 1: GETTING STARTED

Who are eligible to apply to Vesl's services?

  • Companies incorporated in the Philippines.
  • If your business has (or will have) existing contracted buyers
  • If you have cash trapped in receivables. Meaning, you provide (or want to provide) credit terms to your clients where they pay you in 30, 60 or 90 days. Read more about payment terms here
  • Business age requirement: NONE

Why register?

  • If I am a business and I want to do any of the following, I should apply:
    1. Protect my receivables from possible non-payment of my end buyers;
    2. Win new deals by offering payment terms to new and existing end buyers;
    3. Have better credit standing and be matched to more lenders.

How to register?

  • Fill out and sign the 10-15 minute online registration form. Go here to register.
  • Your application will be processed faster if you answer completely and accurately.

What documents do I have to submit upon registration?

  • You must submit the following basic documents:
    • receivables ageing report
    • company’s registration document
    • government-issued ID
  • Usually, these 3 documents will be enough.However, before being matched with a lender, the following documents need to be submitted:
    • Company's List of Buyers
    • Company's List of Suppliers
    • Latest Financial Statement (Unaudited and/or Audited)
    • List of Authorized Signatories, notarized or certified by your Corporate Secretary
    • 3 months latest Bank Statement
    • Proof of Billing of User and Authorized Signatory
    • Business Permit

What’s next after submitting my application?

  • Wait for the insurer’s approval which takes about two (2) business days after you’ve answered all their questions.

How much does registration cost?

  • Registration on the platform does not cost anything.

What’s next after getting insurer’s approval?

  • You can now add your customers’ or end buyers’ information for credit limit approval.

PART 2: CREDIT LIMIT APPLICATION

What is a credit limit?

  • A limit is the most an insurance company will pay for a covered claim.

Why am I requesting for limits first?

  • You need to add your customers so that the insurer can assess and underwrite them before your invoices can be insured. Your end buyer needs to have an approved credit limit for their invoices to be insured.

Should I add ALL my end buyers?

  • You can add as many buyers as you want.

Why do I submit a lot of information about my customers?

  • The insurers need all of these information to properly evaluate your customers’ capacity to pay. This process is called underwriting.

What information about my customers should I submit?

  • Basic information about your customers, including their complete registered address and TIN<;
  • Credit limit you’d like to request for the particular customer;
  • Transaction history with your customer;
  • To expedite the credit limit approval process, you can submit your customers’ latest audited financial statements.

Is there a fee for the assessment of my customers or end buyers?

  • There is a platform fee of Five Hundred Pesos (PHP500) plus assessment fee charged by the insurer ranging from Three Thousand Pesos (PHP3,000) to Seven Thousand Pesos (PHP7,000) per end buyer billed directly by the insurer. This assessment is valid for a year, hence renewable on a yearly basis. The fees are applied for every renewal.

How do I pay for the assessment?

  • You can pay through the third-party payment provider connected to Vesl. They offer various payment methods such as credit card, bank transfers and over-the-counter bank deposit.

Is the buyer assessment fee refundable?

  • No, the buyer assessment fee is not refundable.

What’s next after applying for credit limits?

  • The insurer will come back with approved / rejected credit limits within 2-10 business days, depending on the information you’ve provided on the end buyer.

What are the possible outcomes of the credit limit assessment?

  • Your credit limit application for your buyer may be rejected, approved, or partially approved.

What does it mean when the credit limit application was rejected?

  • It means that the information provided to the insurer was not enough to convince them of your end buyer’s creditworthiness. They will not cover you in the event of its default. The buyer assessment fee will not be refunded by the insurer should your credit limit application be rejected.

Can you appeal for a different decision from the insurers?

  • If you have new and complete information that can provide better proof of your end buyer’s ability to pay, you may send it to the insurer for reconsideration of the limit. There is no additional fee for this.

What does it mean when the credit limit application is approved?

  • It means that the insurers are willing to cover you from your end buyers’ potential default up to the amount indicated.

Does the credit limit approval mean that I am already covered?

  • It only means you can be covered up to the indicated amount, but it does NOT mean you are already covered. You need to upload the invoice you issued to the end buyer and pay the premium in order to be considered covered.

PART 3: INSURING INVOICES

When does trade credit insurance coverage start?

  • Trade credit insurance coverage starts the moment you pay for premiums on the invoice you uploaded on the platform.

What invoices can I insure?

  • Only the invoices to the end buyers with credit limits will be insured. The platform will not accept invoices that are not from the end buyers with credit limits.
  • Only invoices that are 30 days old are eligible for cover. Stale invoices are NOT accepted.

How do I successfully insure an invoice?

  • You can insure a new invoice via your Vesl dashboard. Upload the invoice and your proof of delivery (i.e. trucking receipt, bill of lading, or airway bill, etc) on the platform. Make sure the details on the documents match. Otherwise, the insurers will prompt you to correct and align information on the documents.
  • Pay the premiums indicated on the billing.
  • When you’ve successfully paid for premiums, your invoice is insured.

How do I pay for premiums?

  • You can pay through the third-party payment provider connected to Vesl which offers various payment methods such as credit cards, bank transfers and over-the-counter bank deposit. You are directly billed by the insurer, not by VESL.

Is there a limit to how many invoices I can insure?

  • You are free to upload as many invoices as you want as long as you don’t go beyond the credit limit allotted for every buyer. The platform helps you manage and monitor this. It will not allow you to upload any more invoices if you have used up your limit.

I have too many invoices I want to insure. Can I do a bulk upload and a bulk payment?

  • We will be deploying this feature soon. Stay tuned for updates.

PART 4: APPLYING FOR FINANCING

Why might I need receivables financing?

  • Your cash is trapped in receivables until your customer pays you. There are financing institutions that can lend you money using these receivables as collateral, thereby providing you with working capital and cash flow needs.
  • Example: Imagine being a rubber manufacturer in Marikina and you win a contract to supply for Hilanderz Slippers Inc. They pay 60 days after your rubber delivery. Problem is, your workers need to get paid now. What do you do? Present your receivables to a lending entity. They will encash your receivables and, in exchange, you pay interest until Hilanderz Slippers Inc makes payment then pay your lender the principal amount after.

Can I get receivable financing without trade credit insurance in Vesl Platform?

  • No.

Can I get other types of financing (like short term working capital loans) via the Vesl platform?

  • No, only receivable financing is available. Without insured receivables, the Vesl platform cannot match you with its lending partners.

Why do I have to get trade credit insurance before my business can get funding in the Vesl Platform?

  • The main risk with borrowing using your receivables is the risk of payment default by your buyer. This risk is mitigated by trade credit insurance, and therefore makes lenders feel more secure financing your receivables.

How do I get my insured receivables financed in Vesl’s platform? What is the process that I have to go through?

How long does it take to get approval from a lender?

  • Once you have provided all information correctly and have fulfilled KYC requirements of lenders, you may get approval within 2 to 5 business days.
  • Once you’re approved, financing takes less time to complete (1-3 days) Just (1) Upload invoice for financing and insurance > (2) pay premiums to insure invoice > (3) Get funded by matched lender.

Isn’t the initial process too long? I need my financing now.

  • All businesses on the platform have to go through the initial due diligence assessment and underwriting process. This protects all parties involved.

What if I just want trade credit insurance?

  • That’s okay, too. Just upload your invoice and pay for the premium.

Can I have more than one lender as loss payee?

  • Yes. As a seller, you can have multiple loss payees assigned to your business. However, there can only be one loss payee for every invoice.

Am I guaranteed to be financed with trade credit insurance?

  • There is no guarantee.
  • Your eligibility with the lenders for financing still depends on their assessment of your creditworthiness. Your company’s credit management and credit procedures are important for the lender’s assessment. Trade credit insurance only lowers your risk and betters your chances of obtaining financing.

How are my invoices matched with the lender?

  • The basis for matching depends on the Lender’s preference in terms of invoice size, product or services sold, and company type.

I have a lender, but they are not a partner of Vesl. Is this okay?

  • There is no problem with this. You can connect them to Vesl, and name them as your loss payee.

Where can I see or download the insurance documents as proof that I am insured?

  • For every insured invoice, there is proof of registration (POR) that indicates your invoice is insured. On your Vesl Dashboard, go to Invoices and click “view”. You can download the POR from there.

PART 5: WHAT IS TRADE CREDIT INSURANCE

What are the key features and benefits of trade credit insurance?

  • Trade credit insurance ensures business liquidity.
  • It transforms potential bad debts to cash.
  • Insure your accounts receivables from the risk of non-payment when your Buyer is insolvent or unable to pay

Why is this right for my business?

  • Protects business against bad debts
  • Pays up to 90% of the loss
  • Can covers commercial risks (bankruptcy/insolvency and default) and political risks (political intervention, war/revolution, currency inconvertibility and loss of import/export license)
  • Good source of credit information and enhances borrowing capacity

Am I qualified to apply? Who are qualified for cover?

  • Businesses of any type and size, with domestic and international transactions in the exchange of goods and services, can be covered by the insurer’s Trade Credit Insurance policy. * Financial institutions exposed to borrowers’ trade receivables may also be covered.

What is being insured?

  • Trade Credit Insurance safeguards businesses from two types of risks:
    1. Commercial risk refers to non-payment as a result of Buyer insolvency or non-payment within six (6) months from the original due date.
    2. Political risk refers to non-payment due to risks and/or events beyond the control of the Buyer or the Seller (e.g.public buyer default, war, foreign exchange restrictions or moratorium by overseas governments).
  • The Trade Credit Insurance policy will pay a percentage of the outstanding debt up to 90% of the invoice amount.
  • Credit risks that have no direct link with an underlying trade transaction, i.e. the delivery of goods or services, are not considered under the Trade Credit Insurance policy.

How can Trade Credit Insurance ensure business liquidity?

  • Businesses that sell goods and services on credit terms may have a significant percentage of working capital under accounts receivables.
  • Uncollected, stagnating or long turnover of accounts receivables means increased non-payments. Consequential bad debts adversely affect cash flow and profits.
  • Trade Credit Insurance protects these receivables from late or non-payments, ensuring liquidity.

What is Domestic Credit Insurance?

  • If the Seller decides to only insure his trade with Buyers situated in his own country, the cover is referred to as Domestic Credit Insurance.

What is Export Credit Insurance?

  • If the Seller decides to only insure his exports, i.e. his trade with Buyers based outside the Philippines, the cover is referred to as Export Credit Insurance.

How do Credit Limits work and what is their value?

  • The Insurer assigns a credit limit to every Buyer which the Seller engages with.
  • This limit is the maximum amount that can be borrowed by the Buyer at any time, under given specific terms and conditions.

How is the transaction between the Buyer and the Seller monitored?

  • The Seller uploads the transactions that need cover on the Vesl online platform, hence automatically monitoring them. The seller can manually upload on the platform, or if an digital accounting system is used, the Vesl platform can customize the API connection.

Is VAT included in my coverage?

  • No. The transaction value covered does not include VAT.

Can the Seller allow extension of due date?

  • The Seller may allow payment beyond the due date as expressed in a written agreement with its Buyer/s, provided that the period or extension is not longer than the Maximum Extension Period.
  • If the Buyer fails to pay on the extension date, the Seller must not allow or agree to any further extensions.

Which transactions can I upload on the platform?

  • Only transactions for buyers with approved credit limits from the Insurer can be uploaded on the platform.

PART 6: CLAIMS

When to make the claim?

  • Claims (including all available information) must be made within the stated claims notification period. Provided that the insurer is satisfied that it is liable to make payment, it will pay the Seller the guaranteed percentage either of the amount of the insured company’s loss or of the Credit Limit for the Buyer, whichever is lesser.

How do I file a claim?

  • Login to the platform – Go to claims page, fill out and sign the form.

What to do if there is a possible claim?

  • Through the platform, the Seller must notify the insurer immediately of the occurrence of any event likely to cause a loss.
  • Such an event shall include, without limitation:
    1. the failure of a Buyer to pay any amount still overdue, twenty (20) to thirty (30) days after the expiry of the Maximum Extension Period;
    2. a Buyer requesting an amendment of Payment Terms which is unfavourable to the Seller or an extension of due date beyond the expiry of the Maximum Extension Period;
    3. a Buyer failing to take up the goods or the documents on first presentation where the payment terms are cash against documents or documents against acceptance;
    4. the imminent/actual insolvency of a Buyer;
    5. the Seller’s belief that a Buyer is unable or is likely to be unable to perform or comply with the terms of the contract;
    6. the failure of a Buyer to honor a bill of exchange or a check; or • the institution of any proceedings against a Buyer for non-payments.

When will the insurer pay for the claims?

  • The insurer will usually make such payment thirty (30) days after the Waiting Period, with receipt of all the information and documents required.

Definition of Terms

Accounts Receivable Financing

  • Accounts-receivable financing is a type of asset-financing arrangement in which a company uses its receivables — outstanding invoices or money owed by customers — to receive financing. The company receives an amount that is equal to a reduced value of the receivables pledged.(Investopedia.com)

Credit Limit

  • A limit is the most an insurance company will pay for a covered claim.

Loss Payee

  • A loss payee has the right to receive claims in the event of a default.

Maximum Extension Period

  • The Maximum Extension Period normally runs 30 days after the original payment due date, but can either be shorter or longer, depending on what the Seller expressly allows.

Waiting Period

  • Number of days that must lapse before claim can be paid.