Managing risk is crucial to a company’s ability to grow its business abroad. Medium-Term Credit Insurance equips exporters of capital equipment and related services to win international sales, while reducing risk in the export equation.
Medium-Term Credit Insurance, like any insurance policy, provides protection in return for a premium. The policy safeguards exporters against the risk of foreign buyer nonpayment when extending credit terms of one to five years (or, in some cases, up to 10 years) and up to $25 million. With this security, exporters can increase their global competitiveness by offering buyers the financing needed to win sales.
Use Medium-Term Insurance to:
- Secure longer-term financing for foreign customers.
- Insure against nonpayment by international buyers.
- Cover both commercial (e.g., bankruptcy) and political (e.g., war or the inconvertibility of currency) risks.
Benefits of Medium-Term Insurance:
- Risk reduction: safeguard against catastrophic losses from buyer nonpayment.
- Increased competitiveness: unlock the ability to offer buyers the credit necessary to win international sales.
- Improved cash flow: borrow against insured receivables, turning your collateral into greater borrowing power with your lender.
How It Works
- The exporter offers credit terms to an international buyer to be covered by an EXIM insurance policy.
- The buyer accepts the terms, and provides a cash down payment of at least 15% of the contract price prior to delivery, also issuing a promissory note to pay the remainder of the contract.
- The exporter pays a premium for the policy on the last business day of the month immediately following each insured shipment.
- If the buyer fails to make payments, the financed portion of the contract is insured at 100% by EXIM.
- There is no minimum or maximum transaction amount.