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FINANCIAL SERVICES - TRADE & CREDIT INSURANCE
What does Credit Insurance Mean for You?
Credit Insurance
Click CONTACT US above to request further information and assistance on any of the below items/topics.
Provided protection against:
Commercial:
· Bankruptcy,
· Insolvency,
· Protracted Default/Refusal to Pay, or
· Breach of Contract.
Political:
· Exchange Transfer/Inconvertibility
· Expropriation
· Nationalization
· Confiscation
· Embargoes (Export or Import)
· Cancellation of Required
· Licenses/Permits
· War
· Strikes
· Riot/Civil Commotion
· Governmental Intervention
· Contract Frustration
· Unfair Calling of Guarantees/Standby Letters of Credit and other similar risks.
WHAT IS CREDIT INSURANCE?
Credit insurance is a form of casualty insurance which protects manufacturers, merchants and other suppliers of goods and services against losses that may result from nonpayment by their customers after granting credit terms (SEE BELOW for definitions) to domestic or foreign buyers.
It does not cover physical damage to the product.
It is not at all like credit life insurance
Types of available Credit Insurance:
GOVERNMENT CREDIT INSURANCE
· No Domestic Credit Insurance
· Boilerplate Policies - Rigid
· Politically Approved Countries according to foreign policy
· 51% Domestic Content requirement for Products
· Low Minimum Annual Premiums
· Low Deductibles
· Low Discretionary Credit Limits
· High % Buyer Underwriting
PRIVATE CREDIT INSURANCE
· Flexible
· Countries not politically but economically motivated
· No domestic content product requirements
· Medium-high minimum annual premiums
· Medium-high deductibles
· High discretionary credit limits
· Low % buyer underwriting
· Who underwrites Credit Insurance?
CREDIT INSURANCE UNDERWRITERS
· Government:
· World Bank:
Multi-LateralInvestment Guarantee Agency (MIGA) and multinational reinsurance Transactionsbetween selected foreign government organizations.
· Private Domestic and Export Credit Insurers.
Chubb
CNA
EULER, American Credit Indemnity(ACI)
Foreign Credit InsuranceAssociation (FCIA)
Gerling, NCM
Lloyd's of London
Miscellaneous Insurance/Other Services available
We offer these various policies/services.
See below the available forms of insurance programs.
· Political Risks (Investments)
· Business Credit Reports
· Marketing network
· Financing network
· Miscellaneous Insurance
· Travel Insurance
· Kidnap & Ransom
· Crime
· Inland Marine Insurance
Financing
Banks
Forfaiters
Nonbank Financial Institutions
U.S. Government
Credit insurance is an excellent means to leverage your Balance Sheet by securing non-recourse financing enhanced by the credit insurance policy on your receivables.
Banks. Commercial banks have "asset-based lending" and "international trade finance" departments. Both are capable of structuring creative and sound lending arrangements secured by your insured receivables. "Asset-based lenders" loan against designated assets, including receivables, both domestic and foreign. "International trade finance" departments are schooled in securing loans against insured foreign receivables. Foreign receivables are often excluded by asset-based lenders, or the percentage financed, or "discounted", is greatly reduced. Export credit insurance enables increased financing of foreign receivables on more favorable terms and amounts than otherwise available. The GFS Insurance Brokerage group of companies has contacts with bankers all over the region and the country. Banks tend to specialize by market segment (small, medium or large-sized companies), products or geography (U.S. or foreign). We would welcome the opportunity to refer you to one or more of these banks to explore your options.
Forfaiters. A European concept which is taking root in the U.S. provides an excellent, secure means to obtain short or medium term post-shipment trade finance, primarily for capital goods, and commodities. A typical "forfait" transaction would involve the importer's bank opening a deferred payment letter of credit or providing its guarantee of a promissory note or bill of exchange. The exporter's financial institution or "forfaiter", on the strength of the credit standing of the importer's bank, issues its commitment to purchase the proceeds of the letter of credit or the debt instrument on a non-recourse basis. The forfaiter then agrees to discount the export receivable at an interest rate, fixed or floating, which the supplier may pass along to the importer, either by grossing-up the value of the export or by charging the same rate of interest as in the letter of credit or debt instrument. Payments are made according to terms as set by the respective parties. In the event of a default by the importer, the forfaiter has a claim against the importer's bank. The GFS Insurance Brokerage office assist in this type of financing in addition to credit insurance. We would be pleased to pursue this option for trade finance if it suits your needs.
Factoring. What is Factoring is the sale of your accounts receivable (invoices) at a discount. We pay you for the accounts immediately after you invoice and then we mail your invoice and collect the accounts. You may sell all or selected accounts; some firms sell only a portion of their receivables. We retain the right to decline the purchase of certain accounts. Accounts may be sold as frequently as every day or as infrequently as twice a month. Every day or week you can sell us your current invoices and receive immediate cash for these invoices. Manufacturers, wholesalers and service companies can sell their commercial, industrial or government invoices and receive a check or bank transfer for approximately 70% to 85% of the invoices the same day.
If your monthly volume is between $10,000 and $3,000,000 and you need additional funds in your business, contact us today with regard to our factoring service. On a cases review basis, we can do $10-15M per month.
Nonbank Financial Institutions. Specialty financial institutions, in addition to banks and forfaiters, are often available to address a particular industry, geography or higher risk borrowers. Small businesses, or companies dealing in specialty products or markets might find these specialty lenders of interest. We can refer you to specialists upon request.
U.S. Government. The Small Business Administration and the Exim bank both offer guarantees and loans to stimulate foreign trade for smaller businesses. SBA offers its guarantee of repayment against a commercial loan from a bank, and Exim bank secures the export receivables' portion of the borrower's assets which are used as collateral for the loan. Exim bank also offers its own Working Capital Guaranty program for privately sourced loans as well. Export credit insurance is used as security for both loan programs. Please contact us, or a local U.S. Exporter Assistance Center near you, for more information. In any event, we can provide the appropriate insurance policy which best suits your needs.
To obtain more information on this service click Contact Us