Export Credit Insurance Helps Graceland Fruit Develop its Export Potential
Graceland Fruit, Inc., has been an innovator in its field from its earliest days, perfecting the art of drying fruit that allowed it to become a global leader in providing access to fresh fruit all year long.
A key element of Graceland’s innovative business model was initiated in 1995 when the company started exporting to markets worldwide. To further grow that capacity to export, Graceland realized it needed a way to offer extended payment terms to overseas customers. That’s where the Export-Import Bank of the United States (EXIM) stepped in, providing the necessary support with export credit insurance.
Export credit insurance(link is external) is an insurance policy that protects a company’s foreign accounts receivable against nonpayment by international buyers. U.S. exporters are assured their bottom line will be protected should their foreign customers fail to pay.
That paid off for Graceland, whose export shipments insured by EXIM increased nearly 75 percent from $24 million in 2014 to $42 million in 2018. And, they’re on track to top that in 2019.
“In short, the majority of our revenue would not be possible without the export credit insurance provided by EXIM,” said Al DeVore, Graceland’s CEO.
3 Key Benefits of Export Credit Insurance
Export credit insurance empowers U.S. companies and enhances their competitiveness in the world market. EXIM’s insurance policies can 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 requiring the payment of a premium upon shipment.
EXIM export credit insurance offers three significant benefits:
- Protects Against Nonpayment: Accounts receivable are often a large, uninsured asset on a company’s balance sheet. Export credit insurance allows exporters to safeguard their foreign receivables by covering up to 95 percent of the invoice value.
- Extends Credit to Buyers: Export credit insurance empowers companies to offer customers open account credit terms, giving them the competitive edge to win the deal.
- Provides Access to Working Capital: The insurance enhances cash flow by transforming foreign accounts receivable into receivables that are insured by the U.S. government. With this insurance in place, lenders are more likely to advance U.S. exporters a loan against these receivables.
Graceland’s Increased Exports Translate to New Jobs
With export credit insurance in place, exports now account for about 60 percent of Graceland’s revenue. The company ships products to 65 countries – where some of the largest food manufacturers in the world use the company’s dried cranberries, cherries, blueberries, and apple in breads, muffin mixes, bagels, trail mixes, ice cream, frozen dough, and many other consumer goods.
Not only have Graceland’s increasing exports made delicious treats available around the globe, they’ve led to additional jobs being created at processing facilities in Michigan and Wisconsin.
“EXIM is a vital part of our business,” said DeVore. “It helps to open a critical path to international business that a smaller company like ours might not otherwise have access to.”
EXIM has experts located throughout the country who can answer questions about export credit insurance, provide information on EXIM’s products and services, and guide you through the application process. Contact Stephen.Maroon@exim.gov or call 202.565.3901 to learn more.