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Export financing - Export supplier loan financing
Export supplier loan financing is designed for:
companies exporting to other countries.
Description of export supplier loan financing:
An export supplier loan is provided by the exporter to the foreign purchaser for the delivery of goods or services, i.e. the foreign purchaser can postpone the payment for the delivered goods or services. The originated receivable of the exporter from the foreign purchaser that has postponed maturity is passed by the exporter to the bank which charges a fee for this service so it does have possibility to apply retroactive regress on the exporter.
With short-term supplier credit, i.e. with a maturity of up to 2 years, 100% of the receivable of the exporter is passed to the bank, for a medium-term or long-term supplier loan (with a maturity of more than 2 years) up to 85 % of the value of the business contract of the receivable is passed to the bank (15% of the value of the contract must be paid by the foreign purchaser in advance as an advance payment.
A receivable of the exporter passed to the bank is insured by the company EGAP according to the length of the export supplier loan. The "Bf" insurance is for a short-term export supplier loan financed by the bank, "Cf" insurance is for a medium-term or long-term export supplier loan financed by the bank. The insurance covers the risk of the non payment of the receivable by the foreign purchaser because of territorial (political) or market unsecured commercial risks. For these types of insurance, three-way insurance contract is concluded the parties to which are EGAP and KB, and in addition also the exporter (unlike "D" export supplier loan insurance, where only 2 participants are involved, i.e. EGAP and KB).
The terms for the exporter for financing an export supplier loan are always resolved and contained in the respective contract between the exporter and the bank.
- The financing is recorded to the risk of the foreign purchaser; it is not reflected in the balance sheet of the exporter.
- The financing is specific, i.e. against the submission of invoices or other documents agreed in advance that prove the delivery has been carried out and the existence of the receivable.
- The owner of the receivable and, at the same time, the creditor is the bank.
Before the financing of an export supplier loan is implemented, the following contracts are concluded:
- A business contract between the exporter and foreign purchaser
- A contract on transferring the receivable between KB and the exporter
- A three-way insurance contract between KB (insurant), EGAP (insurer) and the exporter
The advantages of export supplier loan financing:
- The elimination of payment risk
- Rapid repayment of the receivable for the exporter (the respective amount is transferred to the current account of the exporter):
- The amount is paid to the exporter as the difference between the nominal value of the receivable and the discount (i.e. the interest calculated for period from the date of passing the receivable to the maturity date of the receivable) or
- The whole amount is paid to the exporter; the exporter pays the interest from the due amount
- Liquid funds are immediately available after the delivery
- Passing the receivable without sanctioning does not load the balance sheet of the exporter, the creditor is the bank
- possibility to offer referred payment for the foreign purchaser
- The possibility of preparing the repurchase in the pre-contracting phase
- The possibility of including the costs of the repurchase in the price of the delivered goods
How to obtain a Re-financing of export supplier loan?
If you want to know more information about this product or order it directly please contact your bank advisor or call free Info line KB 800 111 055.
