Ex-Im financing helps the global economy, and conducting business between countries would be tough without it. Trade in the global marketplace comes with innumerable risks and concerns, such as shipments lost due to weather or political tensions, nonpayment by foreign buyers, and other entanglements that can financially cripple a business waiting for payment or a buyer in desperate need of goods
What is Ex-Im Financing?
In any international trade agreement, the terms of payment are often a major point of contention between buyers and sellers. Obviously, sellers want to ensure they will receive payment for the goods they ship, and buyers want to be certain they’ll get what they pay for. Ex-Im financing operates as an intermediary and helps international trade function more quickly, efficiently, and with fewer delays in payment.
With Ex-Im financing, sellers can ship their goods with confidence. When goods are in transit without Ex-Im financing, the sale is in a sort of limbo. The buyers haven’t received the goods yet, so they may be hesitant to pay until they receive them. On the flip side, sellers are going to be wary of sending goods overseas without receiving payment first.
Limiting Uncertainty
As you can see, export credit insurance primary goal is to limit the risk inherent in international trade agreements. American businesses have a wealth of opportunity in front of them when approaching the international trade market, and often times export credit insurance eases the tension that comes with undertaking such business arrangements.
The right lender may also provide several other funding options, such as liquidity for pre-export operations.
