Skip Navigation
Risk Management 101: Obtaining a Foreign Buyer Credit Report
August 30, 2016 Suhail Karim Beg, Business Development Specialist, Office of Small Business

Gabriel Ojeda, President of Fitz-Pak Corporation and an EXIM Bank advisory board member, was recently asked in one of our EXIM Bank Going Global Webinars, “What is the number one piece of advice you can give to companies that are looking to export? Without pause Mr. Ojeda answered, “knowing your market, the type of buyer you are selling to, i.e,. whether they are end-users, consumers or industrials and getting to know all about your buyer and their culture.

As a small business owner you might appreciate getting to know their culture, and the export licensing requirements for your products end-use, but we’ll save that for another blog. Your first concern is always how you’re going to get paid. Offering open account credit terms requires significant due diligence on your part to properly address the risk of buyer nonpayment and is an important first step in establishing trust.

How Do I Select Good Foreign Buyers?

Determining a buyer’s ability and willingness to pay starts with a credit check. Credit reports standardize international company information in a common format, which facilitates analysis of the risk of doing business with a particular company. Assessing the risks of extending credit to customers located in another country will depend upon an evaluation of both the buyer and their country risks. While a lot of country risk data may be available for free, you will need to obtain a credit report on the buyer to determine whether they are a good commercial risk. The credit report contains more than just financial information; it tells the story of how well they run their business and their status within the business community. Check out our earlier blog for the seven things every foreign buyer credit report should have listing information on what’s normally required, especially if you plan on financing your transaction.

Where Can I Get a Foreign Buyer Credit Report?

Dun & Bradstreet operates globally and provides credit reports on more than 240 million companies. One caveat—if your buyer is located in an industrialized country the reports will tend to have more detailed financial information. Reports for buyers in countries where public registries or private credit bureaus are spotty will have a lot of the usual financial information missing and the credit report may look more like a reference.

There are additional resources available to you in circumstances where credit reporting is limited. The World Bank Group publishes Doing Business: Measuring Business Regulations which provides information on credit availability. The data includes information on both firms and individuals and is available in searchable and downloadable indices. The IFC participates and monitors credit reporting environments for more than 180 countries.

Your local USEAC can provides  International Company Profile’s (ICP) furnished by the worldwide network of U.S. Commercial Service trade specialists. The ICP provides:

  • A detailed credit report on a prospective overseas sales representative or partner in approximately 15 days or by the date negotiated with the overseas’ office;
  • A listing of the company's key officers and senior management;
  • Banking and other financial information about the company; and
  • Market information, including sales and profit figures, as well as potential liabilities.

The U.S. Commercial Service will  provide you with an opinion as to the viability and reliability of the overseas company or individual you have selected as well as an opinion on the relative strength of that company's industry sector in your target market.

EXIM Bank provides a list of EXIM Bank accepted credit information sources to fulfill Discretionary Credit Limit (DCL) or Special Buyer Credit Limit applications under Multi-Buyer policies, or to fulfill short and medium term Single-Buyer policy application requirements.”

Next Steps

Are you interested in obtaining commercial and political export credit insurance, but were unable to obtain credit or insurance for your transaction? EXIM Bank can help! EXIM Bank relies upon reasonable assurance or repayment, so having  your buyer’s credit information in hand will speed up the processing of your application and allow you to lock in your quote. 

If you qualify for the Bank's Express Multi-Buyer Insurance policy, you won’t need a credit report on your buyer; EXIM Bank will provide a free of charge. For a free consultation with one of our trade finance specialists, click on the link below and receive a call-back within 36 hours.

Get a Free Export Finance Consultation Today!