Export Credits Export credit is providing pre-shipment and post-shipment credit either in Indian rupees or in foreign currency to an exporter.

The credit is given for short term i.e. upto 6 months, medium/ long term which extends more than 6 months according to the eligibility of the products and projects. Usually medium/ long term export credit is given after inspecting the supplier's credits. To promote the export promotion drive, the Government of India established Export Credit Guarantee Corporation of India Limited (ECGC) in 1957 to cover the risk of exporting on credit. This organisation offers a range of services to exporters. They are as mentioned below:
y y y

It provides credit risk insurance covers to the exporters against there loss in export of goods and services. It offers guarantees to the banks and financial institutions in order to enable the exporters to obtain better facilities from them. It provides Overseas Investment Insurance to the Indian companies investing in joint ventures abroad as equity of loan.

Export Credit Insurance Export credit insurance protects the exporter from the consequences of the payment risks due to the far-reaching political and economic changes. Outbreak of war or civil war might block or delay the payment for goods already exported. Coup or an insurrection in the importing country may also bring the same result. Export credit insurance is obtained from the ECGC with the following issued covers:
y y

Standard policies to protect the exporter against the risk of not receiving the payment while trading with overseas buyers on short-term credit. Specific policies which is designed to protect the exporter against the risk of not receiving the payment in respect of: o Exports on deferred payment terms o Services rendered to the foreign parties o Construction work which also includes the turnkey projects undertaken abroad.

The policies are one of the following:

y

Whole Turnover Policies in the form of 'Open Cover' in respect of shipments made during 24 months period DP, DA and open delivery terms. Shipment details has to be declared on monthly basis. Specific policies for exports of capital goods on medium or long-term credit, turnkey projects, civil construction works and technical services.

Procedures for export credit insurance:

y First, apply for insurance you need to fill in the "short-term export credit insurance, comprehensive insurance application form" in triplicate, to the export business name, address, scope of coverage, exports, insurance coverage applicable to the buyer within the list and fill other needs that the situation clear, the enterprise legal signature, the insurance company to apply for export credit insurance coverage. y Second, the application limit of your insurance companies and the receipt issued by the "short-term export credit insurance, all risks insurance policy", you should exit the scope of this policy as soon as every one of our written application to the credit limit, and fill out the "short-term Export Credit Risks Buyer Credit Limit Application Form "in triplicate, according to the requirements of the table, the buyer's situation, the bilateral trade conditions and the limits of the company fill out the required clear-oriented enterprises in the full range of appropriate security Overseas buyers old and new applications for credit limit. y Third, export insurance company declared "short-term export credit insurance buyer's credit limit approve comprehensive list" approved limit, you each shipment, the fifteen days (or the 10th month ago) by batch, fill out the "short-term export credit insurance export integrated declaration "(or" short-term export credit insurance, comprehensive insurance export returns and premiums on the book "), in triplicate, according to the requirements of the table, the export situation truthfully completed clearly calculate and collect premiums for the insurance company. For you do not report within the specified time of export, insurance companies require you to make a report. However, if the report after the loss of export has occurred or is

likely to cause loss event has occurred, the Company has the right to refuse to accept the report after the event. If you have intentionally not reported or serious omission or false positives, the company exports to the place you have to declare the loss of the right to refuse to take responsibility. y Fourth, pay the insurance premiums you receive the insurance company's "premium invoice" and the collection of documents within ten days from the date you should pay the premiums. If not delivered within the prescribed time limit premiums, the company declared for export to you, be liable; if you have not delivered more than two months the prescribed time limit premiums, the Company is entitled to terminate the policy, the premium received not be refunded. The company declared a month and reported by your thin out the rate schedule to calculate the premium payable. For adjustment of premium rates, the Company will notify you in writing, two months after notice of exports of goods, insurance under the new rates. y Fifth, reporting can damage your ship, the buyer has bankruptcy or insolvency, the buyer reject the goods and payment has been made, the buyer for three months past due are paid or unpaid, or happen at the end of the Company under the political risk insurance event, within ten days the insurance company should be reported in the "loss of short-term export credit insurance may notice." To clearly brief the case and in the meantime waiting for compensation, payment collection efforts, in close contact with insurance companies, timely reporting of the collection or handling of the process and results. Six of the losses claimed, and you do not receive payment claim is invalid, the compensation provisions of the insurance waiting period expires, as soon as possible in the form of a written claim to the insurance company and fill out the "short-term export credit insurance claims application," while complete , to provide real "applications" out of

the required documents (including trade contracts, bills of lading, export declarations, invoices, packing lists, bills of exchange, buyers and sellers Correspondence, "approval of a single credit limit", the export declaration form and other information required by the Company). Because the buyer of your losses caused by insolvency claim, the insurance company confirmed that bankruptcy or insolvency of the buyer as soon as Peifu; on claims for losses due to other causes, the insurance company to wait for expiry of the stipulated compensation, as soon as Peifu. The buyer for losses arising from insolvency, if you are not in the buyer is declared bankrupt or insolvent within one month after the claim, on the other causes of loss, not waiting for the compensation claim after the expiry of two months, and is not justified, the insurance company to reject your claim. Insurance company losses within the insurance coverage, respectively, according to the policy schedule listed in the commercial credit and political risk of wind damages caused by the percentage of compensation. But the compensation shall not exceed the credit limit approved by the Company or the insured buyer master of their own credit limit is limited to the above percentages. VII informed the insurance company to transfer your interest in the compensation notice, to be issued, "the book claims receipt and transfer of interest" (in English respectively) and in English, "Recovery of attorney." If the buyer paid or unpaid loans overdue for three months, you reported that "notice of potential loss," commissioned by the insurance company agreed to be recovered, the case must provide a contract, bills of lading, invoices, correspondence and trade between the two sides in English "Recovery of attorney." If you want to learn more about short-term export credit insurance, or want to support short-term export credit insurance, you can directly with the China Business people contact can be with the Guangdong Provincial People's Insurance

Company of China branch of international export credit insurance department division contact You will be satisfied with the service. We sincerely welcome the export companies and enterprises to actively participate in export credit insurance.

Export credit insurance - the seat belt export enterprises:

Export credit insurance export enterprises belt star Sun Wen _ the concept of export credit insurance, export credit insurance (Export Credit Insurance), also known as export credit insurance, for governments to improve the international competitiveness of domestic products and promote their export trade, protect the safety exchange earnings of exporters and banks, credit security, promoting economic development, backed by the state finance for enterprises in the export trade, foreign investment and foreign economic activities such as project contracting provides risk protection in a policy support measures are non-profit insurance business, is the government's indirect control of a market economy means and to add. World Trade Organization (WTO) Agreement on Subsidies and Countervailing support in principle to allow the export of policy instruments. Its responsibilities, the main export enterprises have not received payment after delivery responsibilities, and sometimes expressed as breach of contract by the buyer to make export enterprises exported goods can not be caused by loss; it security risks, including the export of business services in the general commercial insurance companies unwilling or unable to cover commercial credit risk or foreign political risks. International export credit insurance industry began in the early 20th

century, China's export credit insurance started in 1989. In the world today, 12% of world trade is in support of export credit insurance to achieve, the highest 14%, higher in some countries such as Japan is 39%, France 21%. As a policy of insurance business, the nature of export credit insurance business and cash flow characteristics and general business insurance is very different. As international competition intensifies, the requirement to provide 100% of the goods the buyer's letter of credit guarantee funds by way of resistance to overseas buyers. In order to expand exports, the Chinese mainland enterprises to use on credit (O / A), payment (D / P), Documents against Acceptance (D / A), etc. deal with overseas buyers, collection risk is significantly increased. Statistics show that there is: Mainland China enterprise fails to recover the amount of money has been growing year on year increase of 40% per year to 50%. Meanwhile, only 0.1% of the non-foreignfunded enterprises established credit risk management system. The types of export credit insurance export credit insurance is divided into the following three: (a) short-term export credit insurance (referred to as short-term insurance). Put off short-term insurance cover within 180 days of the foreign exchange risks, mainly used for payment (D / P), Documents against Acceptance (D / A), credit (O / A) and other commercial credit payment terms of export. According to the actual situation, short-term insurance can be extended to cover the credit terms of 180 days, 360 days of export, as well as a bank or other financial institutions under the letter of credit issued by exports. (B) long-term export credit insurance (referred to as the long-term risk), credit insurance can be divided into the buyer, the seller of credit insurance and overseas investment insurance three categories. Put off longterm insurance cover of more than one year, generally not more than 10 years of foreign exchange risks, mainly for large-scale electromechanical products and complete sets of equipment exports, and foreign investment, such as the BOT, BOO or form joint ventures set up abroad enterprises. (C) related to performance

and export guarantee insurance (referred to as the guarantee insurance). Guarantee insurance is divided into direct and indirect guarantee insurance guarantee insurance. Guarantee insurance, including opening direct advance payment bond, performance bond issued by insurance; indirect guarantee insurance, including underwriting unreasonable confiscation of the importer exporter bank guarantee. The process for export credit insurance export credit insurance for the introduction process, we must first understand a concept credit limit. Credit limit is the export credit insurance company to the buyer (or the issuing bank) for credit assessment, export credit insurance company on behalf of export enterprises exported to a buyer (or a particular issuing bank under the letter of credit opened by the export of ) The maximum amount of liability. Large enterprise applications, such as the credit limit given full approval of export credit insurance company, indicating that the buyers credit is good; such as export credit insurance company has not been fully approved, the company shipped the goods out of export credit insurance company should be Within the line of credit limit approved arrangement is appropriate; if approved limits export credit insurance company is zero, indicating poor condition the buyer credit, export credit insurance company will not cover, the proposed business carefully shipped. Therefore, the insurance, companies shall be within the scope of protection to the appropriate export buyer (or the issuing bank to open letters of credit under the export) for credit limits, which informed buyers credit, master exchange earnings security. Now our business is relatively more short-term export credit insurance, for example, a brief procedure for export credit insurance. First, fill in the export business, "the application form" and the "Customer Information Form"; export credit insurance company accepts coverage, will insure a complete set of materials to make export enterprises, insurance materials include: "Policy Schedule", "rate table" "Country Classification" and so on. This stage enterprises should be noted that in completing the application form,

the enterprise should be the policy terms and coverage of export credit insurance company agreed to the amount of insurance coverage applicable to such matters, to determine rates. When the issue of export credit insurance company "short-term export credit insurance policies," will come to a complete insurance program. After handling insurance procedures, specific business operation process is divided into three stages: 1, the limit for coverage of each insurance company providing overseas buyers, "credit limit application form." Export credit insurance company to investigate these buyers credit and credit assessment, credit limits approved under the assessment of the situation, and "credit limit approval of a single" pay insurance companies. There are three points to note: (A) the insurance companies limit the buyer's credit investigation and approval takes time, so exporters initialed the contract after the trade, they should immediately apply limits to not affect the execution of the Contract. However, some exporters are often ready the goods, or even to apply for quota loaded the boat, this time after the commencement of the insured goods only to limit the losses suffered by the effective and limit the losses before the commencement of the shipment is not in the insurance coverage. (B) limit the size of the application according to the contract amount, contract execution period, the batch and the loan recovery ship turnaround time required for thorough consideration, the insurance company to fight for the maximum protection limit. (C) limit the application form filled out to make it clear and accurate. Best typing in English only. Scribbled handwriting is not easy to identify, not only affects the accuracy of credit information, but also delay the approval time limit. 2, shipping insurance business reporting the credit limit under the effective delivery to overseas buyers, all shipment of each consignment of export credit insurance company to declare "export declaration", is recognized by the export credit insurance company assumes the insurance for this ticket goods responsibility before shipping. Basically the whole process by fax, express mail, e-mail and other

forms to complete. 3, the claim was informed that the insurance companies or potential losses under individual insurance, and timely reporting of "notice of potential loss" of China for the ECIC. Political risk is often reported time of the incident has occurred, the buyer and the bankruptcy or insolvency of the buyer to reject the goods and so within ten working days from the date of the purchase price or the buyer within two months in arrears. Once the loss of identification, insurance companies fill out the "Claim Form" and provide trade contracts, bills of lading, export declarations, invoices, packing lists, bills of exchange, buyers and sellers Correspondence, "credit limit approved list", the export declaration form and insurance company requirements and other relevant documents to apply for the insurance company for compensation. How economical and effective to buy export insurance While many exporters know that the export credit insurance, but because the insurance premium for avoiding the issue. The current trading environment for all Chinese exporters are very difficult giant. High cost of exports have never had any profits, and then to increase some export credit insurance, more difficult to make a profit. Therefore, most exporters would prefer to take risks, follow the past practice, do not do export credit insurance. How can either buy that export credit insurance, but also control the cost of the cost? First, before signing with foreign investors, then we must treat it as a normal cost of the project into account. Second, the export credit insurance rates depend on country-owned risk category buyer, payment on credit risk level and duration of the length of 3 factors, exporters before and after the transaction should be carefully selected and integrated control, the long-term and short-term Insurance combined. Finally, the insurance company should be operating in good faith, while respecting the insurance provisions, to fulfill obligations of the insured, or deliberately omitting to prevent the situation reported, truthfully fill in the export declaration, scheduled to pay insurance premiums, and actively cooperate with the insurance companies

to do the risk prevention work, and export credit insurance companies can negotiate and get the lowest premium rate. The dual role of export credit insurance export credit insurance in addition to seat belts for International Development Enterprises, but still an effective means of financing international trade. In the increasingly serious problem of financing small and medium enterprises today, the export credit insurance to reduce export risks, easing monetary policy tightening export business loan hard. For insured export credit insurance business, such as participating in short-term export credit insurance, insurance (including comprehensive insurance, credit insurance, the insurance system and the specific buyer protection insurance) companies, according to "claim assignment agreement" provides for compensation with the interests of transferred to the lending banks to get from the bank the corresponding short-term trade financing services. Trade financing export credit insurance include: letters of credit under the Export Trade and export discount; payment D / P, against acceptance D / A and the credit Negotiating under OA. Among them, the highest percentage of financing under letters of credit up to the amount of Reimbursement 90%; D / P, D / A, OA financing under the highest proportion of up to 80%. According to reports, the past four years more than 1100 corporate finance bank billion yuan. This is more than 1100 million mainly driven by export credit insurance to the. Currently, nationwide there are about more than twenty-funded, foreign banks can provide financing under credit insurance. This can be done more than twenty banks, including Bank of China, Agricultural Bank of China, China Construction Bank, Bank, Guangdong Development Bank, DBS Bank, Nanyang Commercial Bank, Sumitomo Mitsui Banking, Standard Chartered Bank. Contrast the general financing products, export credit insurance finance the benefits of export enterprises are: make an inventory of accounts receivable; reduce financing threshold; relatively reasonable cost of financing; really be increased with the financing business development and

growth; breakthrough in fixed assets, limited its own funds and other constraints to business development will bring. Export credit insurance is to promote Chinese enterprises to go abroad and strong backing to address the financing needs of export enterprises a powerful security, and foreign exchange earnings from the ultimate bearers of risk. Although China's export credit insurance business there is still a long cycle such as lack of insurance application, but to learn how to recover the use of export credit insurance or financing of international payment, or the majority of SMEs in China will help expand the overseas market in the road go faster and more stable.

What is ECGC?

Export Credit Guarantee Corporation of India Limited, was established in the year 1957 by the Government of India to strengthen the export promotion drive by covering the risk of exporting on credit. Being essentially an export promotion organization, it functions under the administrative control of the Ministry of Commerce & Industry, Department of Commerce, Government of India. It is managed by a Board of Directors comprising representatives of the Government, Reserve Bank of India, banking, insurance and exporting community. ECGC is the fifth largest credit insurer of the world in terms of coverage of national exports. The present paid-up capital of the company is Rs.800 crores and authorized capital Rs.1000 crores.
What does ECGC do?

 Provides a range of credit risk insurance covers to exporters against loss in export of goods and services  Offers guarantees to banks and financial institutions to enable exporters to obtain better facilities from them  Provides Overseas Investment Insurance to Indian companies investing in joint ventures abroad in the form of equity or loan

How does ECGC help exporters?

ECGC

Offers insurance protection to exporters against payment risks Provides guidance in export-related activities Makes available information on different countries with its own credit ratings Makes it easy to obtain export finance from banks/financial institutions Assists exporters in recovering bad debts Provides information on credit-worthiness of overseas buyers
Need for export credit insurance

Payments for exports are open to risks even at the best of times. The risks have assumed large proportions today due to the far-reaching political and economic changes that are sweeping the world. An outbreak of war or civil war may block or delay payment for goods exported. A coup or an insurrection may also bring about the same result. Economic difficulties or balance of payment problems may lead a country to impose restrictions on either import of certain goods or on transfer of payments for goods imported. In addition, the exporters have to face commercial risks of insolvency or protracted default of buyers. The commercial risks of a foreign buyer going bankrupt or losing his capacity to pay are aggravated due to the political and economic uncertainties. Export credit insurance is designed to protect

exporters from the consequences of the payment risks, both political and commercial, and to enable them to expand their overseas business without fear of loss.

Acquire Export Credit Insuranc

Export credit insurance protects you from the consequences of the payment risks, both political and comm expand your overseas business without fear of loss. Further, it creates a favorable climate for you under w get timely and liberal credit facilities from the banks at home. You can obtain Export Credit Insurance from the Export Credit and Guarantee Corporation of India Limited you Export Credit Insurance, the following covers are issued by the ECGC : y y Standard policies to protect you against the risk of not 7 3 receiving payment while trading with short-term credit. Specific policies designed to protect you against the risk of not receiving payment in respect of: o exports on deferred payment terms o services rendered to foreign parties o construction work, including turnkey projects undertaken abroad The policies are either:  Whole Turnover Policies in the form of 'Open Cover' in respect of shipments made period. You have to obtain credit limit on each one of your buyers to enable ECGC the basis of credit worthiness of the buyer. These policies are basically similar to but only apply to specific contracts.  Specific Policies for exports of capital goods on medium or long-term credit, turnk construction works and technical services. These policies are basically similar to w but only apply to specific contracts. Financial guarantees issued to banks against risk involved in providing credit or guarantee facilitie Special schemes viz. transfer guarantee issued to protect banks which add confirmation to letters cover for Buyers' Credit, Lines of Credit, Joint Ventures and Overseas Investment Insurance, and Risk Insurance. The other guarantees which banks can offer to you through ECGC schemes are :Payments Guarantee,--- Bank guarantee for due performance of the contract by the exporter,---B payment of retention money,--- Bank guarantee for loans in foreign currencies. Details of these sc from your own banker or local office of the Export Credit and Guarantee Corporation of India Ltd.

y y

The Shipments (Comprehensive Risks) Policy is the one ideally suited to cover risks in respect of goods ex credit. Shipments to associates or to agents and those against letter of credit can be covered for only polit endorsements to the shipments (comprehensive risks) Policy. Premium is charged on such shipments at lo For obtaining a policy you should apply to the nearest office of the ECGC in the prescribed Form no.121 (o along with the following documents : (i) Bank Certificate about the financial position (ii) Application form for fixing the credit limit

(iii) Name/address of foreign buyer fixing sub-limits After examining the proposal, ECGC would send the exporter an offer letter stating the terms of its cover a policy will be issued after the exporter conveys his consent to the premium rate and pays a non-refundable for policies with maximum liability limit 7 3 upto Rs. 5 lakhs; Rs. 200 between Rs. 5 lakhs and Rs. 20 la each additional Rs. 10 lakhs or part thereof subject to a ceiling of Rs. 2500.As commercial risks are not cov a credit limit, you are advised to apply to ECGC for approval of credit limit on buyer in the prescribed Form from ECGC) before making shipment. Credit limit is the limit upto which claim can be paid under the policy commercial risks. If no application for credit limit on a buyer has been made, ECGC accepts liability for com maximum of Rs. 5,00,000 for D.P./C.A.D. transactions and Rs. 2,00,000 for D.A. transactions provided that shipments have been effected to the buyer during the preceding two years on similar terms, at least one o than the discretionary limit availed of by the exporter and the buyer had made payment on the due dates.

EXPORT PROCEDURES:
y y y y y y y y y y y y y y y y

How To Export Preliminaries for Starting Export Registration Register with Export Promotion Council Dispatching Samples Appointing Agents Specimen Copy of Agreement Acquire an Export License Acquire Export Credit Insurance Arranging Finance Rates of Interest Understand Foreign Exchange Rates & Protect Against Their Adverse Movement Forward Contracts Procuring/Manufacturing Goods for Export & Their Inspection by Government Authorities Labeling, Packaging, Packing & Marking Goods New Excise Procedure

Export Credit Insurance

The Export-Import Bank of Trinidad and Tobago Limited (EXIMBANK) offers export credit insurance to exporters. This insurance offers risk protection against payment default by foreign buyers of goods and services exported on credit terms. Export credit insurance allows exporters to venture into new export markets.

y y y y y y y y

Who can apply for export credit insurance? What is the application process? What happens after an application is submitted? What does it cost? Where can I find more information? Forms and Other Downloads Related Services Quick Links

Who can apply for export credit insurance?

Small, medium and large enterprises operating within Trinidad or Tobago that would like to begin exporting or would like to increase their export market are eligible to apply for export credit insurance. back to top

What is the application process?

EXIMBANK's Business Development Officers are ready to visit your business to provide you with an application package. Application packages can also be picked up from EXIMBANK's office or downloaded from EXIMBANK's website using the link at the end of this section. Completed applications can be mailed, faxed or scanned and e-mailed to EXIMBANK.

The following supporting documentation should be submitted with the completed application form:

y y y y

One copy of a valid proof of identification for each company director (national identification card, driver's permit, Trinidad and Tobago passport, or foreign passport). Company registration papers (Certificate of Registration, Return of Director, and Return of Registered Address). Audited financial statements for the last three to four years of operation (for an existing business) or an opening Balance Sheet and Projected Cash Flows (for a new enterprise). Completed EXIMBANK forms for each customer/buyer.

The application package should be completed in accordance with the included instructions and

returned, with all supporting documentation, to EXIMBANK.

Export-Import Bank of Trinidad and Tobago Limited (EXIMBANK) EXIM House 30 Queen's Park West Port of Spain Trinidad, West Indies Tel. (868) 628-2762 or (868) 628-1382 Fax. (868) 628-9370 E-mail. eximbank@mail.eximbanktt.com Opening hours: 8:00 am to 4:00 pm, Monday to Friday, except public holidays

Export Credit Insurance application form back to top

What happens after an application is submitted?

An EXIMBANK representative will review the application and request omitted or additional information, if necessary. EXIMBANK will then identify insurance policy options that meet the applicant's needs and come to an agreement with the client on the best option. The client will then complete both the Proposal for Comprehensive Risk Policy and Application for Credit Limit forms and pay the policy set-up fee listed below.

The timeframe for processing an application can vary from two working days to two weeks, depending on a number of variables including the number of approving authorities and the availability of documentary requirements such as financial statements. back to top

What does it cost?

There is a TT$500.00 fee to establish the insurance policy. This fee is subject to change without notice. back to top

Where can I find more information?

For further information please contact EXIMBANK at the address below or visit our website.

Export-Import Bank of Trinidad and Tobago Limited (EXIMBANK) EXIM House 30 Queen's Park West Port of Spain Trinidad, West Indies Tel. (868) 628-2762 or (868) 628-1382 Fax. (868) 628-9370 E-mail. eximbank@

Ex-Im Bank Medium-Term Export Credit Insurance Summary Exporters and Financial Institutions supporting the sale of U.S. capital equipment, its installation and a complement of spare parts if necessary, can insure their foreign receivables against losses with Ex-Im Bank medium-term policies. Ex-Im Bank medium-term policies protect U.S. sales to a single foreign buyer against the buyer's failure to pay an obligation because of unforeseen commercial or political reasons. The policies can often help U.S. exporters obtain financing and, therefore, compete in selling overseas through the use of prudent credit extension practices. Also see Ex-Im Bank's Fact Sheet on the Medium Term Bankto-Bank Credit Line Export Credit Insurance Policy, form EIB99-10. There is no requirement to insure all sales under the medium-term policies since each policy covers transactions with one particular buyer for single

or repetitive sales. Policy Format Policies will be issued in one of two formats: A "Documentary" policy will be issued to financial institutions wherein the insured bank will be required to obtain specific documents (signed buyer obligation, transport documents, invoice and Exporter Certificate, form EIB94-07) which evidence conformity with the policy requirements. If the beneficiary of the funding is other than the exporter, a Beneficiary Certificate, form EIB92-37, is required as well. The insured financial institution is protected against fraud, disputes and other defects of the underlying transaction. The documentary policy is available for both single sale and buyer specific repetitive sales transactions. 1. A "Non-Documentary" policy will be issued to exporters. This policy is assignable to financial institutions and a documentary assignment will be made available to provide the same protection to the assignee financial institution as the documentary policy. The non-documentary policy will be available to accommodate both single sale and repetitive sales transactions. 2. Both formats require the use of an Ex-Im Bank Promissory Note form or a different note form that meets certain criteria. Ex-Im Bank has special promissory notes for Mexico, form EIB92-59, and Venezuela, form EIB97-9, as well as standard notes, form EIB92-58. What Is Covered The maximum cover available under medium-term policies is $10 million. All cover is subject to Ex-Im Bank foreign content guidelines. Ex-Im Bank's

medium-term policies cover: Commercial losses resulting from nonpayment for such reasons as a buyer's insolvency or failure to pay an obligation within 30 days of the due date. 1. 2. Political losses. Ex-Im Bank indemnifies an insured for 100 percent of the financed portion in the event of a commercial loss or political loss. Ex-Im Bank's medium-term policies cover credit sales in which payment terms range between one and five years (exceptionally 7 years) after the goods arrive at the port of importation. Policies are available to accommodate two types of transactions: 1. single sales - one-time transactions; and 2. repetitive sales - ongoing relationships, generally between an exporter and a dealer or distributor. All of the medium-term policies require that the insured obtain a cash down payment from the buyer in an amount equal to at least 15 percent of the contract price prior to delivery. The remaining financed portion is then insured at 100 percent. The buyer's obligation to pay the financed portion must be evidenced by a promissory note. The financed portion must be payable in at least semiannual equal installments of principal and interest. APPLICATION PROCEDURE The applicant submits an application, form EIB03-02. If the application is approved, Ex-Im Bank issues a policy stating the coverage parameters. Those parameters include Ex-Im Bank's limit of liability, the amount of the contract price, the down payment and the financed portion, the payment terms, the premium amount, the final shipment date, and any special conditions

required. Following shipments or funding, the insured submits a report of premiums payable form, EIB92-29 for exporters, EIB92-30 for financial institutions, stating shipments made during the month and accompanied by the appropriate premium check. ELIGIBLE REPAYMENT TERMS The length of payment terms available under Ex-Im Bank medium-term policies depends on the total value of sales and, to some extent, upon the Ex-Im Bank :: Products & Policies :: Insurance

http://www.exim.gov/products/insurance/medium_term.cfm 1 of 2 12/17/2008 4:19 PM unit value of capital goods. The following table shows the maximum terms for specified dollar amounts: Contract Price of Transaction Maximum Payment Term less than $80,000 two years $80,000 - less than $175,000 three years $175,000 - less than $350,000 four years $350,000 or more five years Sales to dealers or others for resale are limited to maximum credit terms of two years. PREMIUM RATES AND PAYMENT All policies require premium payment by the last business day of the month immediately following each insured shipment or funding for financial institutions. Premium is calculated on the financed portion of the medium-term shipments made during the period. Applicants may obtain a non-binding rate indication by referring to the Exposure Fee Calculator at Ex-Im Bank's Internet Homepage or by contacting

the Business Development Division with specifics of the contemplated transaction. Changing conditions may result in a different rate being finally offered than is initially indicated. However, premiums specified by Ex-Im Bank in writing are firm. INTEREST COVERAGE The interest rate insured on medium-term transactions is 100 percent of the rate provided in the note. To be covered, post-maturity interest must be stipulated by the insured in the promissory note. Post maturity interest is covered at the original note rate. Coverage of interest charges may extend to the date of claim payment, or 270 days, whichever is earlier. OVERDUES AND CLAIMS Insureds must report all buyers which fall into default within 60 days of the default and on a monthly basis, form EIB92-28. In all cases, these monthly reports of overdues situations should continue for as long as the overdues exists, or until a claim is submitted. When claims are submitted, copies of all documents pertaining to the transactions, such as invoices, bills of lading, promissory notes and guarantees, must be forwarded in conjunction with the proof of loss form, EIB9226, for review. There is a 30-day waiting period after the date of default before a claim can be filed. The latest date for filing any type of claim is 150 days after the date of default. INFORMATION REQUIRED FROM APPLICANTS Applicant information. A completed application, form EIB03-02, is required. If the applicant is other than the exporter or suppler, such as a financial institution, then information on the exporter and supplier is required. Buyer information - The applicant must also provide information about the buyer

and guarantor, if any. In general, the following guidelines apply: a credit report from an agency, dated not more than 6 months from the application date; a commercial bank checking, dated not more than 6 months from the application date; and three years of financial statements and an interim statement if the latest fiscal year end statement is dated more than 9 months from the application date. Audited financial statements are preferred and generally will be required when ExIm Bank's total potential exposure exceeds $1 million. If unaudited statements are provided, they must be signed and accompanied by a summary of significant accounting practices used in their preparation. Ex-Im Bank has published its Medium Term Credit Standards, EBD-M-39, for Buyers that may be consulted to determine the information necessary and the likelihood of approval. More Information Headquarters U.S. Toll Free Number Worldwide Number Trade Finance and Insurance Internet (800) 565.3946 (EXIM) (202) 565.3946 Refer to Contact Us for counsel http://www.exim.gov This is not a solicitation by the Export-Import Bank of the United States or its employees. It is a descriptive summary only. The complete terms and

conditions of the policy are set forth in the policy, applications and endorsements.

CREDIT INSURANCE GRUDGE PURCHASE OR ESSENTIAL CREDIT MANAGEMENT TOOL? QUESTIONS & ANSWERS Introduction In business, there is only one thing that is really important: getting paid. The only good client so the phrase has it is a paying client. There are, however, a whole host of reasons for non-payment, some simple, some more complex. Whatever the reasons, and wherever the fault lies, however, a bad debt could place your business in serious jeopardy. The business world as we know is littered with incidences of spectacular bad debts bringing companies to their knees. Consider a Balance Sheet. Whilst most firms insure their physical assets (buildings, stock, contents), future income by way of business interruption insurance, and purchase liability insurance to protect against third party claims, far fewer consider protecting their debtors balance, often a significant asset, A simple insurance policy can make all the difference. This is where Credit Insurance comes in.

What is credit insurance? Credit insurance provides your business with protection against the failure of your customer to pay their trade credit debts i.e. money that is rightfully yours. Such a debt can arise as a result of your customer becoming insolvent (i.e. going bust) or because your customer simply fails to pay within an agreed credit period. The protection covers as standard goods sold and delivered but can be tailored to cover many other risks such as pre-despatch work-in-progress and binding contracts. As well as commercial risk, credit insurance can also protect against political risk for those trading abroad. Examples include war or civil war, cancellation of the contract by the government of your customers country, or governmental regulations which prevent the export or import of goods. Credit insurance can indemnify you against a complete spectrum of perils such as inconvertibility, contract frustration, contract cancellation, and export and import restriction problems. Who uses credit insurance? The sensible ones! Credit insurance is suited to all manner of companies, regardless of whether they are trading nationally or internationally, and in all sectors from manufacturing to services. In terms of size they tend to be firms with turnovers from 250,000 through to the turnovers of the largest multinationals. When and why would you consider using credit insurance? On average, companies are estimated to have 40% of their current assets in the form

of trade debtors. (For some companies this figure can be much higher). Research has shown consistently that companies are unable to predict the vast majority of failures to which they are exposed. Indeed it is estimated that up to 50% of all failures concern customers that were previously considered to be both long standing and prompt paying. It is a sobering thought that even the customer you thought you knew best of all could inadvertently end up being your downfall. The cost of bad debt can be very significant. For example, if a company is operating on a 5% profit margin, a 10,000 bad debt would require 200,000 of additional sales to compensate for the lost ground. Double the debt and it is easy to see why businesses can be brought to the brink of collapse. U

Small Business with New 'Export' Sales OrdersCase Study 1Case Study 2Case Study 3Case Study 4

Requires Competitive Payment Terms to Win Export Orders Enterprise- U. S. Manufacturer of Outdoor Advertising Structures Background : 16-year old closely held company is experiencing new sales inquiries and orders from international companies. Foreign buyers require payment terms beyond those normally offered by the exporter. Normal payment terms are 90 days from date of shipment. Foreign buyers desire payment terms of up to 360 days from date of shipment. The exporter's current lender will not include international A/R in borrowing base unless adequately insured by Export Credit Insurance. Product content is 100% U.S. Financial Facts : Annual Sales - $19 million (1% international, which would grow to 20% with pending international orders). Current export orders in hand: $4 million to Mexican buyers. Company is deemed 'small' by SBA Size Standards, average annual export 'credit' sales over the past two years have not exceeded $5 million, they have had an Operating History of more than 1 year and they have a positive Net Worth. Objective : Foreign buyers needed longer-than-normal payment terms on open account to allow time to install equipment and receive payment from their clients (in essence financing their purchase without expensive local bank financing). In this case, foreign buyers require up to 360 days, which the Company could not ordinarily provide without enhancing the quality of the Account Receivable assuring that they would 'get paid' in full and on time. Export Credit Insurance raises the quality of these Export Accounts Receivables, allowing the exporter's

bank to include the Export A/R in their borrowing base and receive funding to complete these export orders and carry the A/R for 1 year. Solution : World Trade Consult, LLC structured a Small Business Short Term MultiBuyer Export Credit Insurance Policy issued by The Export-Import Bank of the United States, the official export credit agency of the United States. This insurance protection plan provides Named Buyer coverage on each new international customer, covering sales terms up to 360 days from date of shipment. In the event of a foreign 'commercial' risk loss (buyer's insolvency, bankruptcy, protracted default in payment), the company would receive 95% of the gross invoice value. In the event of a foreign 'political' risk loss (war, insurrection, cancellation of import licenses, etc), the company would receive 100% of the gross invoice value. The insured exporter pays premium monthly covering only those export sales/shipments insured, with NO MINIMUM ANNUAL PREMIUM REQUIRED WITH ISSUANCE OF POLICY (conserving scarce cash resources). Outcome : Policy was issued and assigned to exporter's lender who included the $4 million International A/R in borrowing base, providing up to $3.6 million (90%) in working capital funding to complete these export orders. In addition, the exporter's insurance premium of 1.55% for the export sales insurance covering 360 day open account payment terms was much lower, thus more competitive than local Mexican bank financing. With NO First Loss Deductible and only a small 5% co-pay in the event of a 'foreign commercial' loss, the insurance coverage was the fullest in the market for small businesses