EXIM provides U.S. businesses with solutions to protect against foreign buyer nonpayment and support the export of American-made goods and services. A popular product that allows businesses to protect themselves against foreign buyer nonpayment is export credit insurance.
What Is Export Credit Insurance?
Export credit insurance is an insurance policy that covers a business' foreign accounts receivable against commercial and political risks. It assures U.S. companies that their bottom line will be protected should a foreign customer fail to pay. If a foreign buyer defaults due to an unforeseen bankruptcy or foreign political issue (e.g., war), an insurance company or the U.S. government will reimburse the business for a portion of its loss.
EXIM and its dedicated and approved insurance brokers offer policies that cover an entire export portfolio, a handful of foreign buyers, or just one single buyer. Additionally, most policies only require paying a premium upon shipment.
How Can Export Credit Insurance Protect Against Buyer Nonpayment?
Businesses that insure their accounts receivable make certain that, should a foreign buyer not pay, they will be reimbursed 85-95 percent of their invoice amount. As a result, U.S. businesses can confidently expand into new markets without fear of foreign buyer nonpayment.
Meanwhile, with their accounts receivable insured, businesses can leverage additional benefits of export credit insurance, including the ability to offer more flexible open account credit terms or access unrealized working capital from a lender. With working capital and insured foreign receivables, U.S. businesses can access a more consistent cash flow, allowing them to focus on what matters most: producing quality products and pursuing new sales.