Here at the Export-Import Bank of the U.S (EXIM), Export Credit Insurance (ECI) is the most popular trade finance solution we offer. ECI is more than risk protection, it’s a tool that allows you to be on an even playing field with your global competitors.
However, you may have some questions on the nuances of ECI. We’ve listed out the top frequently asked questions:
Q: How much is Export Credit Insurance (ECI) going to cost for a small business?
A: The premiums of an ECI policy will vary from $0.55 to $1.15 per every $100 of invoice value [1]., For example, our newest ECI product Equity Express Select costs $0.55 per every $100 of invoice value for credit terms up to 60 days. Meaning to protect a shipment of $10,000 to a foreign buyer, the premium cost is just $55 ($10,000 x .0055). To discover which ECI policy is best suited for your individual situation, we would encourage you to contact an EXIM export finance specialist directly.
Q: Time is money; how long does the application take? How difficult is the application?
A: All of our ECI applications are completed online, and the majority of exporters work with an EXIM insurance broker. EXIM brokers guide exporters through the application process and provide ongoing service, such as assistance in filing claims. The turnaround time for most ECI applications is under 10 business days [2].
Q: I’m a small business, what if my business is too small?
A: No business or deal is too small. EXIM has insured deals that range from a few hundred dollars to billions of dollars. For most policies, exporters pay premiums only on products that they ship, assuring that there are no lost premium dollars. Unlike other insurance policies, you only pay when you need your ECI policy. For buyers of Multi-Buyer Insurance, there is also no minimum annual premium required. There are special policies for small businesses that offer up to 95% coverage against nonpayment by foreign buyers on short-term credit sales, with no deductible.
Q: What options do I have if I have only one buyer? How about if I have multiple buyers?
A: There are ECI policy options that cover a single foreign buyer, multiple buyers, or the exporter’s entire export portfolio. Policies cover both commercial and political risks. For Single-Buyer Insurance, coverage rates range from 90-100% of the invoice value at an affordable premium.
For Multi-Buyer Insurance, no advance premium is required from small businesses (fewer than 500 employees), and no minimum annual premium is required. Standard coverage is 95% of the invoiced amount, and sovereign buyers are covered at 100%. Bulk agricultural commodity exports qualify for 98% coverage.
Q: Simply put, why do I need Export Credit Insurance?
A: Export Credit Insurance allows you to extend credit to international buyers while protecting your company from nonpayment. An additional benefit of export credit insurance is that it provides you with the opportunity to consider flexible sales options like mixed terms. Whether you're building new partnerships, exploring new markets, or simply seeking deeper customer engagement, mixed terms could be the difference in securing that sale with your international buyer.
Q: What are the main eligibility requirements to qualify for EXIM Support?
A: To meet the eligibility requirements, small businesses need to:
- Been in business for at least a year.
- Have at least one person working in the firm full-time.
- A positive net worth.
- Export products and/or services that have more than 50% U.S. content based on direct and indirect costs (e.g. labor, materials, and administrative costs, but not markup).
[1] Pricing examples for small business Multi-Buyer policies and Express Insurance.
[2] Not all applications are approved in this timeframe and the 10 days period is assessed from the date that EXIM receives a complete application.
