Have you credit-qualified your foreign buyer? A U.S. exporter seeking to obtain EXIM’s Export Credit Insurance coverage for a sale must compile the required documents for EXIM’s underwriting department to have the foreign buyer considered. EXIM reviews these documents to determine if the foreign buyer meets EXIM’s qualifications. This due diligence process reveals much about the foreign buyer’s business operations and its likelihood of repayment. If the amount of requested coverage by the U.S. exporter increases, so does the transaction risk; and therefore, the amount of information needed by EXIM to make a prudent underwriting decision. EXIM supports all transactions, regardless of size, but simply needs more data points to make a determination on the larger ones.
The following guidelines are a general summary from EXIM's Short-Term Credit Standards. Transactions are categorized by transaction size and all require that the foreign buyer has been in the same general line of business for the past three (3) years.
Transactions Up to $100,000
Only one of the following is required:
- A favorable credit report on the foreign buyer
- A favorable trade reference (preferably from a U.S. supplier) about the foreign buyer
- Favorable ledger experience from the applicant
- Foreign buyer’s audited or signed unaudited financial statements from the two most recent fiscal years
Transactions from $100,001 to $500,000
Required:
- A favorable credit report on the foreign buyer
Additionally, one of the following is required:
- A favorable trade reference (preferably from a U.S. supplier) about the foreign buyer
- Favorable ledger experience from the applicant
- Foreign buyer’s audited or signed unaudited financial statements from the two most recent fiscal years
Transactions from $500,001 to $1,000,000
Required:
- A favorable credit report on the foreign buyer
- Foreign buyer’s audited or signed unaudited financial statements with notes for the last two fiscal years
Additionally, one of the following is required:
- A favorable trade reference (preferably from a U.S. supplier) about the foreign buyer
- Favorable ledger experience from the applicant
For more details about EXIM’s policies, including foreign buyer qualification requirements, please click here to schedule a consultation with an EXIM trade finance specialist.
