Insure all sales to eligible international buyers by extending "open account" credit terms with confidence. Qualified businesses receive a simplified premium schedule, no first loss deductible, and financing opportunities. Standard policies include 95% coverage for political and commercial risks, with special rates for countries with no risk factors. Purchasing Trade Credit Insurance will help you in the following areas;
- Mitigating Risk: Insure your accounts receivables against nonpayment by foreign buyers. This insurance protects you against non-payment due to both commercial risks (insolvency, bankruptcy, and default) and political risks (revolution, war, political violence, and transfer risk).
- Marketing: Extend competitive credit terms to international buyers. Increase your sales by offering attractive credit terms and compete more effectively with foreign competitors. This will reduce the need for costly letters of credit and cash-in-advance requirements.
- Financing: Access additional credit in tight economic times by using insured accounts receivables to increase borrowing capacity. Most major banks accept insured receivables as additional collateral.
Case Study:
A large automotive parts manufacturer based in the Midwest with 3,500 employees and $84 million in international annual sales purchased export credit insurance with the EXIM Bank to mitigate nonpayment risk and access additional finance options with Wells Fargo Bank. The manufacturer obtained a Standard Multi-Buyer policy that provided a $7.5 million revolving line of limit to cover foreign customers. The manufacturer's umbrella rate of .42 per $100 on 60 days terms includes commercial and political risk coverage on parts exported to customers in Korea, Mexico, Poland, India, UAE, Thailand, Slovakia, Germany, Italy, Luxembourg, and Japan. The EXIM Bank endorsed Wells Fargo Bank as a loss payee to the policy and added the qualified insured accounts receivables on their line of credit increasing the manufacturer’s borrowing capacity.
How much does Export Credit Insurance Cost?
Premiums are based upon the industry and location of your organization. The rates can very greatly from country to country and even city to city within the designated location and between different industries and economic sectors. An example of an average Multi-Buyer rate for Net 60 days open account terms is .55 per $100.
Contact our International Trade Credit Sales Representative, Troy W. Brownrigg, for more information, rates and quotes at (248) 373-5580 or tbrownrigg@brownrigg.com.
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