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Loan insurance for financing production intended for export (Product F)

Loan insurance for financing production intended for export (Product F)

The insurance serves for minimizing risks of the financing bank based either on insolvency or protracted default of the buyer to fulfil his payment commitments production for export. The insured in this case is the Bank of the Slovak exporter. Such insurance may be a condition of the bank for obtaining credit.
Loan insurance for pre-export financing is used in the case that you decide to finance production for export by means of a loan. The financing bank with this requires as a condition of providing the loan insurance against the risk of non-repayment in consequence of the inability of the exporter to fulfil the conditions of the export contract.

Advantages for the exporter

  • The insurance may help you with obtaining the necessary production financing, since thanks to the insurance a bank minimizes its risk of non-payment of a loan in consequence of non-fulfilment of the export contract.
  • Our experienced team will accompany you from the first contact during the entire duration of the contract. We offer you our long years of expertise in the field of export financing (risk analysis of the country, buyer, bank, impact on the environment, and others).

Frequently asked questions

When is such insurance most advantageous?
The insurance is suitable primarily as supplementary insurance to a standard insurance of receivable payment from a linked export contract and the production itself is paid from a bank credit intended for this.

What is the period of the insurance?
The insured period depends on the maturity of the pre-export credit, which is the subject of the insurance and usually no longer than 4 years.

What are the basic conditions of the insurance?
• The conditions for obtaining the insurance are:
o ensuring payments of receivables from a linked export contract (products A, B, ABT, C, D);
o insurance of production risk against the risk of a cancelled contract from the side of the foreign buyer (product E);
o insurance for industrial risks, e.g. natural disasters responsible for damage, interruption of operations and lost profit.
• The amount of the premium of the loan depends on the length of the linked export credit, namely as follows:
o if the export credit is payable to within 2 years, the value of the loan for financing production for export is maximally 85% of the value of the export contract;
o if the export contract is payable in over 2 years the value of the loan for financing production for export is maximally 75% of the value of the export contract and 15% of the value of the contract must be paid in advance.
• Participation in the claim fulfilment is usually 20%
• Our mission is, among others, to support employment and the development of production capacities in Slovakia. For this reason the Slovak share in the export is an important criterion when assessing your project.

And what about impact on the environment and the social impact of the case?
EXIMBANKA SR respects its international obligations. For this reason with projects with a maturity of the loan longer than 2 years we assess their impact on the environment and the observing of human rights in the communities affected by the project. Evaluation begins with the submitting by the exporter of a filled in questionnaire which is an appendix to the insurance application. After determining the importance of the impact of the export on the environment, we assign your project to one of three categories(A, B, C) and on the basis of this we decide whether the export will be assessed by a professional appraisal of the impact of the export on the environment.

What kind of risks does the insurance cover?
The insurance is focused on non-marketable risks, i.e. those which commercial banks and insurance companies are unwilling or incapable of insuring. The insurance covers risk of inability of the exporter to meet the conditions of the export contract due to a bankruptcy proceeding for a debtor and other reasons.

How much will it cost?
The amount of the premium rate depends on several factors, such as the country of the foreign buyer, the credit of the foreign buyer, the length of the contract, the method of ensuring payment, delay of payments, participation of the financing bank and the like. The premium rate is assessed for each project individually.

How is the insurance paid for?
The insured pays the premium in one payment in advance. By payment of the premium the insurance policy acquires force.

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