Export credit insurance is a form of insurance that safeguards a business’ foreign accounts receivable. Credit insurance equips exporters with the assurance that, should a foreign customer default due to political or commercial risk, their export business will be compensated for a percentage of the foreign invoice.
Export credit insurance can not only help exporters grow their international sales, but also allow empower them to better manage their business.
5 Benefits of Export Credit Insurance
- Expand Into New Markets
Expand into new markets confidently knowing that — should a foreign customer default — your business will be compensated up to 95 percent of your foreign invoice.
- Boost Sales with Existing Customers
Many exporters have existing customers that would buy more with an extension of credit terms, or an increase in the credit line offered. A safety net for business’ foreign receivables allows it to seize opportunities and increase sales.
- Unlock More Attractive Financing
Banks are hesitant to lend money against export-related assets. With credit insurance, your bank will likely be more willing to lend against foreign accounts receivable, knowing that they are backed by the full faith and credit of the U.S. government.
- Transfer the Burden of Credit Management
As an exporter, you’ve got enough on your plate. The one thing you don’t have is time. Export credit insurance can help by easing the burden of credit risk management and allowing you to focus on what you do best. A relationship with the Export-Import Bank (EXIM) and its credit management expertise can improve receivables management from buyer assessment to protection to collection. EXIM’s Express policy even includes complimentary foreign buyer credit reports.
- Realize Tax Benefits
When doing business, your financial department needs to account for a loss reserve. Purchasing export credit insurance, your business can reduce its loss reserve knowing it will be compensated for foreign customer nonpayment and, in turn, lower your business’ overall tax burden since the premiums paid for export credit insurance are tax deductible.
EXIM offers policies that support businesses and exports of any size. No transaction is too large or too small.