One of the most important parts of your exporting business is maintaining relationships with clients. Another is your ability to make new ones. Your payment terms play a huge role in this. Buyers aren’t only looking for good deals; they want to be able to pay on a flexible schedule. It’s easy to turn off buyers with rigid payment terms when they know that your competitors are more flexible.
Insurance Boosts Your Business
If you want to stay relevant and competitive in the global marketplace, you must understand how export credit insurance works and what it can do for your business. Export credit insurance helps protect your organization against foreign buyer nonpayment, but it also (and perhaps more importantly) provides the flexibility needed to attract new business and expand your operations.
Your buyers want to pay for their purchases as easily as possible, and you naturally want to be paid for sales as soon as possible. A foreign buyer isn’t going to find up-front full payment terms attractive. They may need your goods before they can be in a good place to pay for them and cover operational expenses. Of course, you don’t want to wait for them to resell your goods so they can pay their bill. Export credit insurance can in some cases provide up to 90% to 95% of the sale. The buyer then remits payment to the lender.
Export Credit Insurance Protects Your Business
Export credit insurance (and specifically, political risk insurance) is a fantastic measure of protection when you’re selling to developing countries or to entities in regions facing political unrest. Insurance can protect your goods from being appropriated or seized by government entities, and it also ensures payment in the face of currency exchange rate issues and civil unrest.
Consider Drake Finance for your export credit insurance needs. With over $200 million in U.S. exports financed the world over and Ex-Im Bank approved lender status, Drake Finance is poised as one of the most successful and reputable companies to facilitate international trade