Risk is always on the exporter’s mind. Even credit-worthy foreign buyers may default on payments due to circumstances beyond their control. Export Credit Insurance from the Import-Export Bank of the United States (EX-IM) will improve your accounts receivable management transferring the risk to EX-IM, and protecting you from foreign buyer non-payment.
Increase and Expand Sales
Export credit insurance helps grow your business. Many foreign buyers will only buy on credit. Credit insurance permits you to extend repayment terms to these customers. This process helps retain sales for businesses that generally require advance payment.
Secure Attractive Bank Financing
Are accounts receivables the largest uninsured asset on your balance sheet? Foreign accounts receivable insurance increases your borrowing capacity and increases attractive credit terms.
How Export Credit Insurance Works
- Export credit insurance covers commercial risks such as insolvency of your buyer, bankruptcy, and potential default. Export credit insurance also covers political risks – that is, actions taken by the foreign government which prevents you, as the exporter, from receiving payment. Such actions may include events such as terrorism, expropriation, and inconvertibility of currency.
- Like any insurance policy, premiums are paid for protection. EX-IM reimburses up to 95 percent of the invoice face value if the foreign buyer fails to pay.
- EX-IM credit insurance is tailored to fit your specific needs. Policy options cover single buyers, a defined set of buyers, or your entire export portfolio. EX-IM short-term policies insure credit terms up to 180 days and, in certain instances, up to 360 days for capital equipment.
The Tennessee Small Business Development Center is a Regional Export Partner for EX-IM Bank. If you would like to take the risk out of your export equation, please use the contact page to contact the TSBDC International Trade Center.
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