Offer your customer financing for million-figure orders and gain a stronger position
What we offer
Requirements for your business
How a Buyer Credit Guarantee works
The Buyer Credit Guarantee puts Danish export companies in a better position to offer a customer in a foreign country long-term financing on a specific export order. Many Danish exporters use this financing solution as an extra selling point when negotiating contracts abroad.
With a Buyer Credit Guarantee, EKF guarantees payment to a bank that gives the foreign customer a loan so that they can pay you. The guarantee means the bank is certain of getting its money back, since EKF compensates the bank if, for example, the foreign customer is unable or refuses to pay, money cannot be transferred out of the country, or if war breaks out in the country.
How your buyer obtains financing with a Buyer Credit Guarantee
You want to offer your customer long-term financing
Your customer wants to place an order with you and also hopes to obtain financing for the order. You are keen to help your customer, and together you find a bank that is interested in financing the order, typically a major Danish or international bank, who can offer a lower interest rate and longer credit period than the customer could obtain at home.
The bank requires security
The bank is willing to take on a certain amount of risk for the transaction, but the bank also wants to obtain risk coverage for part of the financing. This is where EKF comes into the picture.
EKF runs a credit rating check on your customer
The bank contacts EKF, who assesses the customer's credit rating and the political risk in the customer's country.
The paperwork
If EKF can approve the customer and the country, the bank should prepare an application to be processed by. EKF also conduct a risk assessment in regard to environmental protection and human rights based on the IFC's performance standards and guidelines.
Offer
EKF issues an offer with a term of six months, which the bank can use when and if the overall financing falls into place.
And we're done
EKF issues a Buyer Credit Guarantee to the bank, and you can deliver the order and receive your payment immediately. The customer services the bank loan, but as an exporter, you carry no financing risk since you are not a party to the financing.
