Export financing programs are a wonderful asset, but it’s vital for U.S. exporters to know what they need when shopping for these programs. Different companies have different needs, and there’s no one-size-fits-all solution. When you shop for an export-financing program for your export business, know the red flags that warn you about questionable lenders. Keep the following advice in mind when you decide to investigate such a financing program.
Policy Terms
You’ll obviously want a policy that offers the coverage you need for your specific operation, so make sure the company you investigate is flexible in its policy structuring and in its premium rates. Oftentimes, the longer you’ve been in business, the better your premium rates will be. If an export financing company has strict policies with no room to maneuver, you may want to look elsewhere.
Creditworthiness
Your company’s creditworthiness and credit history will undoubtedly impact your export financing program shopping. If you have a solid history, a reliable and trustworthy insurer will find a way to work with you. Companies with strained, poor, or too little credit history may face higher premium rates than expected, but if a company makes an exorbitant offer, it should be considered reason to pause and reevaluate doing business with that company.
Coverage Types
Depending on where you do your business, you’ll have different needs. Your export-financing program should offer coverage for your biggest risk areas, such as natural disasters, currency fluctuation, destination country economic instability, and other similar circumstances. Additionally, make sure your program includes political risk insurance if you export to regions experiencing civil unrest, war, riots, terrorism, expropriation, and other political concerns. If an export-financing program only covers a limited scope of eventualities, try to find one that offers more-robust coverage.
Keep these tips in mind when it comes time to shop for export financing programs for your company. Make sure a potential insurer offers the coverage you need at a reasonable rate, and steer clear of any that display these red flags.
Don’t settle for a cookie-cutter approach to export financing. The highly trained experts at Drake Finance will help guide you toward an export-financing program that is affordable and reliable and meets the needs of your business.
