Frequently Asked Questions

Here are the common questions we get asked about credit insurance.

Click on the plus icon for each question and the answer will display.

What does MCT & MEP mean?

Generally for Australian customers the maximum credit terms (MCT) are 60 days from invoice with a maximum extension period (MEP) of 60 days from due date of invoice. This accommodates 30 days end of month terms. If longer terms are required you are required to apply for it with reasons for longer terms.

If maximum credit terms in a policy is 60 days , it means the maximum credit terms you can offer your customer is 60 days. If you do not get paid within the 60 days,  you are able to give your customers an extension of up to 60 days from due date of invoice. The debt only needs to be reported to Atradius if the extension period is breached. You must stop supply at this point as any deliveries made whilst your buyer is in breach of maximum extension period will not be insured.

Whatever your payment terms are on your invoice are the established payment terms with your customer in the event of a claim.  The extension period starts from the due date on the invoice.

For example:
If your invoice states payment is due within 14 days from invoice and your invoice was issued on 2nd July then your due date is 16th July. The maximum extension period starts from 17thJuly.

If your invoice states payment is due 30 days from end of month and you issue the invoice on 2nd July then your due date for payment would be 31st August and MEP would start from 1stSeptember.

The key here is although the policy may allow for maximum credit terms up to 60 days, it is the terms specified on your invoice that’s most relevant in the event of a claim.

Does your business need to register for GST?

Do sole traders & company’s need to be registered for GST to apply for a credit limit?

If the business GST turnover (gross income minus GST) is $75,000 or more then yes, the sole trader or company will need to be registered for GST. It is the responsibility of the sole trader or company to register for this, failing to do so might mean you need to pay GST on sales you’ve made since the date you were required to register as well as other penalties and interest. You can visit the Australian Taxation Office for more information on how to register. If your GST turnover is less than $75,000 then registering for GST is optional, if you’re a non-profit organisation your threshold for GST turnover is slightly higher at $150,000 or more.

How long does it take to pay a claim?

We’ll be able to examine your claim and notify you of the claim amount to be paid within 30 days, providing you’ve supplied us with all the documentation required. Providing these documents upfront, at the time you lodge your claim, can speed up this process. Here’s a list of what we need and why:

Documentation Why
Invoices relating to your claim 
  • To identify the policy holder and the buyer
  • To confirm the terms of payment because each policy has a maximum credit term
  • To see the product or service sold to determine if it’s covered by the policy
Evidence of payment terms (if is it not showing on the commercial invoices)
  • If payment terms are not indicated on the policy holders invoice, then this usually appears on a credit application or in correspondence between the policy holder and the buyer. 

Statement of accounts for 6 - 12 months prior to the oldest outstanding invoice through to and including final statement

  • In Excel provide a system derived debtors ledger that includes individual transactions raised during this period with invoice dates, amounts, payments and credit notes. This allows us to do a reconciliation to determine if the maximum extension period has been breached which could mean an automatic stoppage on cover.
Evidence of debt
  • Evidence of the debt from a party other than the policy holder needs to be provided so we can confirm that debt is owing on the policy. For example evidence from a buyer, court or insolvency practitioner will be accepted.
All correspondence between the policyholder and the debtor, or other interested parties
  • Providing all correspondence in relation to the matter starting from the oldest invoice up to the date of claim can help support the efforts you’ve made to collect the money owed to you 
Any securities, retention of title, caveats or guarantees
  • Providing details of the stock in the buyer’s possession and actions you’ve taken to minimise loss can help us understand any potential recoveries either before or post payment of a claim.

    If we can recover money post paying your claim by pursuing a guarantor or recovering stock through a retention of title then you’ll gain a share of this in proportion to the loss.  
Discretionary credit limit documentation
  • On your policy it will outline your discretionary credit limit procedure. This will let you know what documentation needs to be provided, it can include things like payment experience over the last 12 months within the maximum extension period, credit reports, trade references and compliance with credit management procedures
Declaration of turnover
  • Most of the time you’ll need to complete an annual declaration of turnover for each policy, usually every 12 months. Before we can pay a claim this needs to be up to date.

For export claims only:

Delivery/bill of lading documentation & debt correspondence 
  • To determine that goods have left the country
  • To see evidence of the total debt owed and that it’s not subject to any dispute



The statements made herein are provided solely for general informational purposes and should not be relied upon for any purpose. Please refer to the actual policy or the relevant product or services agreement for the governing terms. Nothing herein should be construed to create any right, obligation, advice or responsibility on the part of Atradius, including any obligation to conduct due diligence of buyers or on your behalf. If Atradius does conduct due diligence on any buyer it is for its own underwriting purposes and not for the benefit of the insured or any other person. Additionally, in no event shall Atradius and its related, affiliated and subsidiary companies be liable for any direct, indirect, special, incidental, or consequential damages arising out of the use of the statements made information herein.