Accounts Receivable Put Options
An accounts receivable put option, or PUT, is a contract that can help protect a business against nonpayment by a specific customer. PUTs are often used for higher-risk accounts when traditional risk management tools are unavailable or insufficient. They provide a defined amount of protection for an agreed period.
PUTs are typically used for domestic public companies or companies with publicly traded debt. They may help businesses continue trading with customers when other suppliers have withdrawn. PUTs can also complement credit insurance by addressing gaps in coverage.
Use the calculator to explore how credit insurance could support your business and cash flow.
PUT Options Calculator
Results — With and Without PUT Protection
Please note: Calculations are based on the PUT period only, not the entire year, to more accurately reflect the cost effectiveness of the PUT.
Annual Sales divided by the number of months sold before bankruptcy
No Protection / No Put
100% Protection with PUT
No Protection / No Put
100% Protection with PUT
The "notional" amount or the total amount of the PUT you are considering. This is also the figure we will use as the bankruptcy amount.
No Protection / No Put
$0100% Protection with PUT
Sales for the period multiplied by your variable gross margin
No Protection / No Put
100% Protection with PUT
Total dollar amount charged for the PUT
No Protection / No Put
$0100% Protection with PUT
Gross profits minus the total cost of the PUT
No Protection / No Put
100% Protection with PUT
This document is provided for general informational purposes only and does not constitute legal, tax, accounting, insurance, brokerage, risk management, or other professional advice. You should consult your own legal counsel or other qualified professional advisors regarding your specific circumstances, and receipt of this document does not create any client, advisory, fiduciary, brokerage, or other professional relationship with Alliant Insurance Services, Inc. This document is provided “as is” without warranty of any kind, and Alliant Insurance Services, Inc. disclaims any liability for any loss or damage arising out of or relating to reliance on this document.