EXIM provides U.S. businesses with solutions to protect against foreign buyer nonpayment and in turn support the export of more American-made goods and services. One product in particular 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 your business' foreign accounts receivable against commercial and political risks. It assures U.S. exporters that their business' bottom line will be protected should their foreign customer(s) 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 your business for a portion of its loss. EXIM and its dedicated brokers offer policies that cover an entire export portfolio, a handful of foreign buyers, or just one single buyer. Additionally, most policies come with the added benefit of only paying a premium upon shipment.
How can Export Credit Insurance protect your business against buyer nonpayment?
Businesses that insure their accounts receivable ensure that, should a foreign buyer not pay, they will be reimbursed 85-95% of their invoice amount. Additionally, with Export Credit Insurance, your business can confidently expand into new markets without fear of foreign buyer nonpayment. Meanwhile, with your accounts receivable insured, your business can leverage additional benefits of Export Credit Insurance, including possibly offering more flexible credit terms or accessing unrealized working capital from your lender. With working capital and insured foreign receivables, your business can access a more consistent cash flow, allowing you to focus on what matters most: producing quality goods and services and pursuing new sales.