Small and Medium-sized Enterprises (SMEs)

60 years of success

The export guarantee scheme has proved itself in over 60 years and its underwriting tools have shown themselves to be an indispensable instrument in the protection of export credits. This makes them a major element of the Federal Government’s activities to promote foreign trade. The objective at the heart of all this – securing jobs in Germany – has also been achieved to an impressive degree: according to an expertise compiled by the Basel-based research agency Prognos AG, Hermes guarantees secure some 200,000 jobs in Germany across all sectors of the economy.

And not only German exporters benefit from federal export guarantees: They play an important role for the buyer countries too. With their help, less developed countries are enabled to import state-of-the-art technology from the industrialized world. More than 80 % of specific guarantees are in respect of plants, machinery and equipment, ships and aircraft. Also many developing and threshold countries can only finance and implement infrastructure development programmes with the help of these export guarantees, thus laying the foundations for their future economic development.

Importance of Federal guarantees for SMEs

An important emphasis of the Federal Government’s work is to promote the interests of small business. This is also true of the export guarantee scheme. Our advisory and information services have always been particularly tailored to the needs of small and medium-sized enterprises and to issues of relevance for them. Small and medium-sized exporters, in particular, are only able to fulfil orders from high-risk countries in many cases with the help of Hermes Cover. They are much less able to absorb possible bad debt losses than larger companies. Three out of four applications for cover come from the small business sector. This adds up to a total of 30,000 applications every year. In many cases these are for small transactions on short credit terms. But small firms are regularly involved as subcontractors in large-scale projects as well.

Is the transaction eligible for cover and is the risk justified

Only transactions which are eligible for cover and in which the risk is justifiable can be covered. Most German export business is eligible for cover. The criteria are, for example, whether the export transaction safeguards or creates jobs, principally in Germany, whether it maintains presence in markets, as well as its relevance for overall foreign, developmental or structural policy. Business involving subcontractors in the new federal states or with a high level of participation from small and medium-sized enterprises is considered particularly deserving of cover.

A guarantee can only be granted, however, if the risk is justifiable. The IMC stipulates the requirements for cover for each country. These take into account the financial strength and economic policies of the country concerned, as well as macroeconomic and political factors. In addition to this, the foreign buyer‘s creditworthiness and his payment record are scrutinized. Even if a buyer is insufficiently creditworthy, it may be possible to cover the transaction if a state or bank guarantee is forthcoming. No cover can be given, however, in cases where there is a high probability of loss.


1. Exporter/bank

  • Submits the application

2. Euler Hermes Aktiengesellschaft

  • Examines the details in order to assess eligibility for cover
  • Checks if the risk is justifiable
  • Produces a report on the transaction

3. IMC makes its decision

  • Decision to grant cover in principle, where appropriate after certain conditions/requirements have been fulfilled

4. Exporter/bank

  • Notifies when contract is signed

5. Euler Hermes Aktiengesellschaft

  • Confirms its commitment after any conditions required have been fulfilled
  • Issues declaration of guarantee