Big projects, big security
Capital goods credit insurance
As a manufacturer of capital goods, your company transacts long-term business deals in terms of the manufacturing and credit period. Therefore, you take on a financing function towards your customer without, however, having the ability of a bank to either check risk or hedge against bad debt.
Higher risk through long credit period
Usually, this is related to a one-off customer relationship for which there is no underlying payment history. Furthermore, these cases generally involve high volumes. The bad debt risk is disproportionately higher for delivery of capital goods then it is for short-term revolving business.
A capital goods credit insurance covers your company’s long-term trade receivables, for example for machines, equipment, factories, airplanes and ships.
Security from begin of production
With a capital goods credit insurance you will receive coverage notes over the entire term of the business deal – up to 60 months. A premature exit from the coverage by the credit insurer is practically impossible. This provides you with planning security and improves your refinancing possibilities with banks.
A coinsurance of the manufacturing risk, which begins with production of the product and not only after its shipment, makes sense, since it usually pertains to special orders. Depending on the buyer country, the coverage can also be extended to include the coinsurance of political risk.