What Is Export Credit Insurance?
Export credit insurance protects your company’s credit and increases company cash flow.
United States exporters can benefit from using export credit insurance when extending credit terms to international customers because the insurance covers the risk of foreign buyer non-payment and enables U.S. exporters to receive an advance on the insured transaction.
- Reduces the risk of buyer non-payment.
- Increases U.S. exporter’s cash flow.
- Helps U.S. exporters attract, retain international clients with financing.
- Empowers U.S. companies to export with confidence.
1. Export credit insurance limits the risk you take when extending credit to a foreign customer on an export sale.
Without export credit insurance, you stand to lose 100% of the export sale, should the foreign customer default for whatever reason. With it, you pay an insurance premium on an export transaction that covers up to 95% of the invoice amount, should the customer default due to political or commercial reasons.
2. Insuring an export credit sale allows U.S. exporters to receive an advance against that receivable.
When an export credit sale is insured, lenders are able to advance monies to U.S. exporters against those insured receivables. Exporters can insure and cash in on the export credit sales of their choosing. Drake Finance typically advances up to 90% of an export invoice when it’s insured with export credit insurance from the Export-Import Bank of the United States, the official export credit agency of the United States of America.
3. U.S. exporters can attract more clients across the globe and close more sales than the competition by offering aggressive financing terms to credit-worthy customers.
Having the best deal closes more sales than simply having the best product or service. With export credit insurance, U.S. exporters are able to offer credit-worthy international customers industry-best terms, even if it’s a first-time sale in a new market.
4. U.S. companies can export with confidence.
Export credit insurance gives U.S. exporters the peace of mind they need to expand into new markets. It empowers exporters because they’re able to extend competitive financing terms and not have to compromise company credit or cash flow in the process.