Blockwise Engineering is a small privately held family business in Tempe, Arizona. It designs, builds and sells manufacturing equipment to customers around the world. Its customers then use the equipment to manufacture medical devices such as angioplasty balloons and stents. All of Blockwise’s machines are made at their plant in Arizona. Some customers are huge corporations, some are small start-up companies, and some are sizes everywhere in between.
Medical device manufacturing companies are located all over the world, not just in the United States. Therefore, about half of Blockwise revenue comes from the sale of machines to customers on all continents. Most its sales are to companies in China, Japan, and Europe since many medical device manufacturers located in those countries.
A Blockwise machine can cost $50,000 or $100,000 each, which is a very costly piece of equipment. Therefore, it prefers to have their customers pay for the machines before delivery, but in the global market, that’s not always customary. If Blockwise requires all customers to pay before delivery, they could potentially lose sales if their competitors accept open account terms.
The company turned to EXIM’s trade credit insurance that cover 95% of its sales invoice if their customer does not pay. With an EXIM insurance policy, it also allows foreign customers to pay on “open account” terms, typically 30 to 90 days after delivery. This nonpayment protection enables the company to enter new markets as well as sell more to current customers.