Credit insurance could become even more of an issue for the channel in 2010 as the economy lifts out of recession and the number of companies going to the wall rises.
The oft talked about proverbial green shoots are emerging, albeit sporadically across certain sectors however banks continue to operate stringent lending criteria.
A recent report by credit insurance brokerage Marsh said "the severe, widespread economic downturn has featured the retrenchment of banking credit, the drying up of letters of credit and the virtual disappearance of the secondary banking market.
"These conditions have resulted in a significant rise in payment defaults and corporate failures, which in turn has been reflected in significant increase in claims," it added.
The IT market has not been on the hit list of industries deemed "off cover" but neither has it been immune to insurers' reduction in limits, as many providers up the premiums or refuse to underwrite poor quality risks.
This has led Marsh to investigate alternatives; it felt top up insurance - as in the Government's failed scheme - was considered "too restrictive", and neither the secondary insurer market or Export Credit Agencies offered a silver bullet.
"At the moment there is no easy solution. There is no ready pool of trade credit insurance to underwrite marginal and problematic risks declined by the major insurers," stated Marsh.
In 2008, three of the largest underwriters which account for 90% of the $8bn total annual premium income for trade credit insurance had high loss ratios; Euler Hermes at 78%, Atradius at 99% and Coface at 73%.
Across the entire UK channel, businesses ranging from system builder Mesh, to retailer DSGi through to corporate giants such as SCC have seen their limits cut, yet despite insurers' nervousness, company fatalities has remained relatively constant.
Bell Micro European credit director Eddie Pacey said, "While this year to date has been surprisingly low in the context of UK IT failures and therefore claims, there is a feeling in the credit insurance sector that next year may be more painful than this."
A lot of firms have cut their cloth according to the current economic climate but as the market moves out of recession, many will not have the operational effectiveness or working capital to cope with an upswing.
"It is a common trend that business failures increase as we move out of recession," added Pacey.
Both the insurers and the banks are obviously aware of this trend and may cut cover on high risk firms during the upturn said Mark Ancell, head of intelligence at Graydon UK.
"This will put further pressure on the distribution channel to finance these companies' sales during this period. Unfortunately not all these businesses will get the backing they require to survive in the long run."
The channel's historic reliance on credit insurance is waning said Nitin Joshi, founder at Channel Money and distributors would need to invest more in the credit function.
"Credit insurance will be tight next year so if a distributor is worth its salt it will need to monitor credit more effectively in the absence of cover and be more innovative in how it trades with partners, looking at special arrangements including debentures and escrows."
Joshi advised resellers to be more aggressive when their line is cut, to demand face to face hearings with the distributor and credit insurer and come armed with up-to-date management and company accounts.
"Ask for an urgent meeting with the distributor whose cover is being reduced and insist that the insurer is present at the meeting so that you can explain its decision is unwarranted as often these decisions are technically driven, not commercially.