Four benefits of International Trade Credit Insurance

Four benefits of International Trade Credit Insurance

Credit Guarantee | September 26, 2017

International trade involves buying and selling over extended periods of time, with a variety of countries that operate in very different legal systems, environments, financial structures and cultures.

As an exporter, you face greater risks than sellers operating within South Africa, because there are times where you may have no previous experience of dealing with your buyers. In addition, there could be political and economic uncertainties, or disasters in your buyer’s country.

With all these uncertainties, it is therefore imperative, to cover your business against non-payment or other unforeseen events outside your control as an exporter.

International trade credit insurance, also known as export credit insurance, protects your business in the event of your buyer’s protracted default. Read on for the additional benefits you can experience when you take out a policy with Credit Guarantee.

  1. Protect against the non-payment of your buyer

International trade credit insurance with Credit Guarantee will cover you against the risk that you will not be paid for a range of reasons. Depending on the policy you choose, risk covered can include:

  • Protracted default – where your buyer fails to pay for an undisputed and insured debt;
  • Insolvency – where your buyer is granted a sequestration order; provisional winding-up order and/or a judicial management order;
  • Any law in your buyer’s country which restricts/controls/prevents the importation of goods into that country;
  • Any law in your buyer’s country restricting the transfer of funds – beyond your control, back to you; and
  • Conflict – such as the occurrence of war or other disturbances in your buyer’s country.

Trading internationally presents a spectrum of risk. Protect your business against commercial and political risks beyond control with Credit Guarantee.

  1. Get access to new markets in different countries

In addition to protecting your company from receivables-related risks, our international trade credit solution can help your company grow. It allows you to sell more to existing buyers with less risk and even sell to new markets or buyers.

For instance, suppose you’re considering selling your product in a new country, but you’re uncomfortable with the potential risk of selling to the prospect. We can help! We use our extensive knowledge, gained over the past 65 years of experience in trade credit insurance, to provide your business with the market knowledge you need to make informed decisions in foreign markets. With trade credit insurance, you can create new global markets and trade with confidence.

  1. Get expert assessment of credit and country risk

You can get access to our professional portfolio of monitors who track your buyers’ ability to meet financial obligations. As a leading trade credit insurer in South Africa, with an African footprint and global access, we can offer you protection against unique export risks and we focus on the continual improvement in the quality of customers. This therefore lowers the incidence of bad debt.

  1. Take advantage of enhanced financing mechanisms

By taking out trade credit insurance, you provide your business’ finance providers with added security. Subsequently, you may find it easier to get financing and attain cash flow relief.

Get the flexibility of a policy to cover your international trade needs

With international trade credit insurance from Credit Guarantee, you have the flexibility to choose the cover that best suits your needs. For instance:

  • You can get cover that commences on the day you and your buyer sign your contract, until the date of shipment of goods or completion of the service;
  • If you manufacture or procure tailor-made goods that will be difficult or impossible to resell to another buyer for certain risks, you can get Export pre-shipment cover for this purpose.
  • You may choose to cover insured contracts you conclude in all countries you trade with; or you may tailor your cover for select countries only.
  • If your company does not have an extremely large export turnover, you can get protection against non-payment of an insured debt from an insured buyer in an insured country.

Don’t trade internationally without the expertise and security you need to be successful. Dealing with foreign buyers and volatile exchange rates can be complicated. At Credit Guarantee, we can protect your business from the loss of proceeds by foreign debtors with our international trade credit insurance solutions. Contact Credit Guarantee to protect your business and take on global markets with confidence.

Credit Guarantee is an authorised financial services provider. T’s and C’s apply.

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