Amid the business challenges we’re all facing this year, there are also opportunities for growth. The global financial crisis is not affecting every sector of the real economy. Many companies are growing, often by expanding their international sales. While overall exporting volume is lower than it was a few years ago, worldwide market demand for goods and services continues to engender a considerable amount of international trade . . . and even growth in some sectors. The U.S. economy is projected to remain relatively flat throughout this year and into 2015 before beginning to recover, but with just five percent of the world’s population and less than one-quarter of global GDP, the U.S. is not the only country with purchasing power. While all countries are linked to some degree by economic interdependence, different cultural, political and market forces will lead Europe, Asia, Latin America and other regions each on their own trajectory.
Facing limited access to capital in their own countries, as well as high interest rates, new regulations and currency exchange controls, foreign companies are turning to their international suppliers for working capital in the form of longer payment terms. Exporters who seek to capitalize on sales opportunities emerging this year, next year and beyond can use export credit insurance and other financing tools to respond competitively to the global market’s heightened demand for trade credit.
You need to extend competitive credit terms to grow your international business, but what happens if you don’t get paid? Your foreign customers could go out of business or file bankruptcy, face currency devaluations or foreign exchange problems, run short on cash, take you for a ride, or fail to pay you for any number of other commercial or political reasons. You can protect your foreign receivables against virtually all non-payment risks with an export credit insurance policy.
Export credit insurance is an effective sales tool that enables you to extend competitive payment terms with confidence. It can help you penetrate new markets, negotiate larger order quantities, establish or expand distribution and increase the profitability of your export business. If you finance your receivables, the coverage will also make your foreign A/R more attractive to banks, factors and other lenders so you can negotiate the most favorable advance rates and loan terms.
All of your foreign receivables can be covered under one multiple-buyer policy that assigns a credit limit for each customer or insures the credit decisions you make yourself based on your own experience. Premium rates are a fraction of a percent of your covered export sales, less than the fees typically charged for letters of credit. Whether or not you pass this incremental expense to your customers, the price is insignificant compared to the additional business you gain by extending competitive credit terms.
MERIDIAN FINANCE GROUP & EX-IM BANK
The Export-Import Bank of the U.S. is the official export credit agency of the United States, with a mandate to provide financing, insurance, and guarantees that increase US exports. Each year Ex-Im Bank programs support billions of dollars in US export sales, strengthening the US economy and creating or sustaining an estimated 250,000 jobs nationwide. Rather than costing US taxpayers money or adding to the fiscal deficit, in the past five years Ex-Im Bank has returned more than $1 billion to the US Treasury.
Meridian Finance Group has worked with Ex-Im Bank for over 20 years and has received Ex-Im Bank’s “Broker of the Year” award three times. While most of Meridian’s credit insurance and trade finance business is underwritten in the private sector, Meridian is particularly proud of the work it does with Ex-Im Bank to support US exports. Exporting is one of the key components of the United States’ economic recovery and, in partnership with Ex-Im Bank, Meridian is helping hundreds of US exporters to expand their international sales.
Meridian provides access to trade finance tools that exporters can use to expand their international sales, including export credit insurance, cross-border equipment financing, foreign buyer credit lines, political risk insurance, supply chain financing, international leasing, L/C insurance and other services. Meridian’s clients include banks, non-bank lenders, multinational corporations and—with no minimum size requirements—middle-market companies and small business exporters nationwide.
Specializing in trade-credit insurance, Meridian helps exporters extend competitive payment terms overseas while protecting their foreign receivables against default risks. With export credit insurance, exporters can be confident of getting paid, use credit as a tool to increase international sales and arrange financing by making their foreign receivables more attractive to lenders. In addition to Ex-Im Bank, Meridian brokers policies underwritten by every other government agency and insurance company in the market.
For more information, visit www.meridianfinance.com or contact Robina Peanh, Regional Manager – International Insurance Services, Meridian Finance Group. [email protected].