Would you like to obtain working capital for your export finance transaction without burdening your regular lines of credit with your bank?
The Working Capital policy provides exporters with insurance for the additional working capital facility needed to pre-finance export transactions without burdening regular credit lines. It covers the lender against default of principal, interest and late payment interest until the exporter receives payment on delivery.
In a world where companies are constantly looking for ways to secure their international trade, the working capital policy provides an essential financial solution. This product allows exporters to pre-finance their export transactions without burdening their regular lines of credit. This protection allows companies to continue to operate and grow even when payments from abroad are delayed.
The Working Capital policy covers the financier of your additional working capital facility for your export transaction against default of principal, interest and late payment interest. Cover applies until you are paid by your client upon delivery (cash or from an after-financing). If you default, damages will be paid to the financier after a three-month waiting period.
The financier providing the working capital facility will bear 20%-50% of the risk.
Risk Analyses
Insurance for working capital financing often comes into the picture when your current lines of credit are insufficient for your working capital needs for your export transaction. The purpose of working capital financing cover is therefore to create financial headroom, thereby enabling you to conclude more export transactions.
Atradius will assess the creditworthiness of your organisation. In general, our exposure for a single transaction may not exceed your organisation’s equity, and our total exposure for all the transactions we have insured for you may not exceed three times your organisation’s equity.
When deciding whether to underwrite a transaction, we will also determine whether additional security will be required, such as a pledge on the goods being manufactured and the related inventories. If the continuity of your organisation would be at risk if your client should default, Atradius will be able to provide insurance for working capital financing only in combination with its exporter’s insurance policy.
Financing in Foreign Currency
It is possible to take out insurance for a loan in other currencies than the euro. For stable, hard currencies (such as the US dollar, British pound or Japanese yen) the premium and any indemnification will be denominated in the currency concerned. In many cases we can also insure loans in other currencies. In such cases, the counter value of the premium and any indemnification will be calculated and payable in euros. When we insure loans denominated in a foreign currency, we will pay any indemnity at the relevant exchange rate up to a maximum rate. The cap rate is usually very high and therefore most of your exchange rate risk will be covered.
Documentation
Atradius does not take documentation risk. This means that we do not examine the loan and security documentation when underwriting a transaction. You will be asked to provide key details of the loan on the application form. In our insurance policy we will stipulate any conditions which we require you to include in the loan documentation.
Our financing policy is available to Dutch and foreign banks. Non-OECD country banks are also eligible after a positive reputation check.
